Foxconn’s e-car unit Foxtron falls in market debut amid gloomy prospects

Taipei — Shares in Foxtron Vehicle Technologies, a unit of Taiwanese contract manufacturer Foxconn, fell in their market debut on Monday, hurt by concerns about headwinds in the highly competitive electric vehicle market.

Foxtron shares did recover some ground from earlier losses of as much as 9%, ending down 2.7%, which gave it a market capitalisation of about $2.7bn.

In addition to inflation and higher interest rates, which have raised the cost of buying a car, EV makers are grappling with supply-chain bottlenecks and pricing pressure.

“The EV market has been flooded by a red sea of price cuts by major players such as Tesla,” said an analyst at Mega International Securities, who asked not to be named, citing the firm’s policies on commenting publicly on listed companies.

“Foxtron has lost money in 2021 and 2022, and we don’t think it will turn that around in the next two years.”

Foxtron is a joint venture between Foxconn — the world’s largest contract manufacturer for iPhones and other consumer electronics — and local car maker Yulon. It currently has only one client, Luxgen, which is owned by Yulon.

Young Liu, chair of both Foxtron and Foxconn, said, however, that the company had a clear strategy for growth.

“Foxtron will build its foundation in Taiwan, leveraging our own design and service momentum in EV, as well as Foxconn’s proven business models to guide our entry into the North America, Southeast Asia mainstream markets.”

The company raised T$7.5bn ($235m) in its initial public offering.

Separately, Liu declined to comment on what contingency plans Foxconn has should founder Terry Gou finalise his run for Taiwan's president by registering with the election commission, which he has until Friday to do so.

In October, China announced a tax probe into Foxconn — a move by the Chinese newspaper that revealed the investigation was attributed to Beijing’s unhappiness with Gou’s decision to run for president. 

Reuters