Shares in Foxtron Vehicle Technologies, the electric vehicle unit of Taiwanese tech giant Foxconn, flopped on their market debut on Monday, amid concerns over a downturn in the EV sector.
Foxtron’s shares did recover some ground from earlier losses of as much as 9%, ending down 2.7% which gave it a market capitalisation of around $2.7 billion.
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, chairman of both Foxtron and Foxconn, said, however, the company has 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$7.5 billion ($235 million) 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.
China last month announced a tax probe into Foxconn – a move which the Chinese newspaper that revealed the investigation attributed to Beijing’s unhappiness with Gou’s decision to run for president.
- Reuters with additional editing by Sean O’Meara