A new company under cooperation between PTT Plc and Taiwan-based multinational electronics manufacturer Hon Hai Precision Industry Co will be set up to develop an electric vehicle (EV) production facility, worth US$1-2 billion, in the Eastern Economic Corridor.
The move followed a memorandum of understanding on the EV business in Thailand, signed in May by the national oil and gas conglomerate and the Taiwanese firm, also known as Foxconn.
The EV factory will be developed to serve end-to-end operations covering the design, manufacturing and assembly of EVs as well as producing key components for EVs.
The initial manufacturing target is set at 50,000 cars per year. The volume will increase to 150,000 annually in the next stage.
"This initiative will not only help increase the business potential on the world stage, but it will also respond to the government's policy to promote EV production, which is set to be a fast-growing industry," said Auttapol Rerkpiboon, president and chief executive of PTT.
He was speaking as PTT and the Taiwanese firm recently signed a joint venture agreement in an online ceremony, presided over by Deputy Prime Minister Supattanapong Punmeechaow.
The new firm, which has yet to be named, will be established with registered capital valued at not more than 3.22 billion baht. Its registration is expected to be completed by the fourth quarter this year.
PTT invests in the new company through its wholly-owned Arun Plus Co while Foxconn makes the investment through its wholly-owned Lin Yin International Investments Co (Lin Yin).
Their final investment decision will be made within the second half of next year.
Mr Auttapol said Arun Plus and Lin Yin will hold 60% and 40% stakes, respectively, in the new firm.
The EV manufacturing facility is designed to use Foxconn's state-of-the-art technology for EV development under Foxconn's Mobility-In-Harmony concept.
Foxconn's hardware and software technology will significantly reduce time used for EV design stage and cost of EV manufacturing, which will eventually increase competitiveness in the EV market.
PTT Group will apply its expertise in business operations in Thailand to the joint project.
Their investment is expected to be part of efforts to help Thailand change its status as a major oil-powered car manufacturing country to a hub of EV production in Asean.
Meanwhile, PTT Exploration and Production Plc yesterday announced it will spend capital expenditure worth $5.6 billion this year to increase sales volume of petroleum by 6% to 410,000 barrels of oil equivalent per day, said Phongsthorn Thavisin, president and chief executive.
The money will mainly support oil and gas drilling in Thailand, Myanmar, Malaysia, Oman and the United Arab Emirates.