PTT and Foxconn sign deal to make electric vehicles in Thailand

Analysts on Wednesday voiced optimism on a joint deal to produce electric vehicles in Thailand between the kingdom’s largest energy firm PTT and Taiwanese leading electronics contract maker Foxconn.

PTT President Auttapol Rerkpiboon informed the Stock Exchange of Thailand late Tuesday that the firm has signed a deal to produce electric vehicles and parts. PTT subsidiary Arun Plus will hold a 60-per-cent stake of the joint venture, while Foxconn’s affiliate Lin Yin will hold the rest.

“PTT has a great potential to become a leader in the electric vehicle industry, as it will own a large proportion of market share backed by government support,” said analysts at Land and House Securities.

PTT is a state-owned oil and gas conglomerate in which the Finance Ministry holds a 51-per-cent stake.

This investment will enable Thailand to become South-East Asia’s major hub of electric vehicle production, said Auttapol, adding that it “will stimulate national investment as well as enhance Thai people’s skills and vocations.”

The registration is expected to be completed by the fourth quarter of 2021, with registered capital of not more than 3.2 billion baht, according to the statement.

In the next two to three year, the venture will begin its production with a target of 50,000 vehicles per year, before reaching 150,000 units in the future. The plants will be located inside the Eastern Economic Corridor of Thailand.

Analysts held a positive view on the PTT’s joint investment, saying electric vehicles are set to emerge as a mega trend as more businesses are heading toward the eco-friendly movement.

Both Land and House and Trinity rated ‘Buy’ on PTT with a target price of 46 baht. The stock traded at 39 baht as of 2.44 pm, equal to its prior closing, with the biggest trading value of 1.53 billion baht.

PTT and Foxconn are not the first to establish electric vehicle production sites in Thailand. Earlier in June, China’s Great Wall Motors opened its factory focusing on producing electric vehicles in the Eastern Economic Corridor for the Thai and regional markets, according to Nikkei Asia

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