PTT Public Company Limited's headquarters in Bangkok. (Photo: Wikimedia Commons)
The electric vehicle market in Asia has been bustling in recent days. Japan's two major automakers, Honda and Nissan, confirmed they are considering a merger. Soon after, reports emerged that Foxconn is interested in acquiring Nissan, aiming to bolster its brand in the electric vehicle sector.
While it remains uncertain whether Foxconn can replicate the "Sharp model" to expand its electric vehicle footprint, its plans in Thailand are clearly facing significant obstacles.
Thailand's car market cools down
In 2021, Foxconn entered into a partnership with Thailand’s state-owned oil company, PTT, to jointly establish an electric vehicle assembly plant in Thailand, with a planned investment of up to $2 billion, and an expected annual production capacity of 50,000 units by 2024.
However, the project has encountered several setbacks. Reports indicate that PTT is reducing its stake in the joint venture, and there is even the possibility of withdrawing its investment. The construction of the factory has also come to a halt.
Over 90% of PTT's revenue comes from fossil fuel-related industries, with the company also involved in mining and pharmaceuticals. While EV making is part of its strategy for a sustainable transition, this new venture has faced considerable challenges in the past year.
Factors such as Thailand’s slow economic growth, tighter bank lending standards, and a downturn in the car market have all negatively impacted the electric vehicle project. In October, vehicle sales in Thailand dropped by more than 30% compared to the previous year.
PTT faces setbacks in green transition as 90% of revenue comes from fossil fuel business. (Photo: PTT)
PTT’s green transition faces headwinds
Additionally, under Thailand's favorable policies, Chinese automakers such as BYD, GAC Aion, Great Wall Motor, and SAIC Motor have aggressively expanded operations in the country. These companies are not only gradually replacing Japanese and South Korean automakers but are also affecting the demand for PTT’s electric vehicle assembly plans.
The change in PTT's leadership has also played a crucial role in altering the direction of the EV project. The company is undergoing a restructuring process, and if the EV business is deemed unprofitable, it may be scrapped just like its previous ventures in fast food and plastic production.
Kongkrapan Intarajang, former CEO of PTT Global Chemical, took over as CEO of the group in mid-2024 and has stated that he will carefully evaluate the viability of non-fossil fuel businesses.
Despite these challenges in the electric vehicle sector, PTT continues to push forward with efforts in renewable energy. The company has committed to investing 100 billion Thai baht ($2.8 billion USD) by the end of 2027. PTT has established Thailand's first hydrogen refueling station, involved in the development of sustainable aviation fuel (SAF) and carbon capture technologies, and is collaborating with Japan’s Mitsubishi Heavy Industries on green ammonia research.
The company aims to reduce its carbon emissions by 15% by 2030 compared to 2020 levels and achieve net zero emissions by 2050.
Source: Nikkei Asia, Foxconn, The New York Times
