National oil and gas conglomerate PTT Plc has decided to divest its shares in Horizon Plus, a joint venture set up to produce electric vehicles domestically, following tougher competition in the EV market.
The decision, which was approved on Tuesday by shareholders of Horizon Plus, will result in Horizon Plus ceasing to be a subsidiary of PTT, said Pattaralada Sa-Ngasang, chief financial officer of PTT.
PTT invested through its wholly-owned Arun Plus to hold a 60% share in Horizon Plus, with the remainder belonging to Lin Yin International Investment Co, which is under Taiwan's Hon Hai Precision Industry Co, a multinational electronics manufacturer known globally as Foxconn.
The divestment, expected to be completed by June, will reduce Arun Plus's shareholding to 40%, while Lin Yin will have a 60% share.
Horizon's paid-up capital will be reduced by 5.1 billion baht as a result.
The reduction of paid-up capital aligns with PTT's business restructuring plan and will not affect PTT's business operations, said Ms Pattaralada.
PTT needs to adjust its investment in the EV business because of the glut of battery-powered cars in the market, she said.
The economic slowdown in China is another factor behind the divestment, according to PTT.
PTT chief executive and president Kongkrapan Intarajang, who succeeded Attapol Rerkpiboon last year, said earlier the company would revisit its EV-related businesses, including car assembly, but will focus more on EV charging services.
The government is promoting the growth of the EV industry by offering EV incentive packages to manufacturers.
Under the "30@30" policy, Thailand expects EVs to represent at least 30% of total auto production by 2030, with 725,000 zero-emission cars, 675,000 electric motorcycles and 34,000 electric buses and trucks.
In 2022, PTT, through Hoirzon Plus, decided to build an EV factory in Chon Buri under a 37-billion-baht investment. The plant, completed last year, has an annual production capacity of 50,000 vehicles.
PTT earlier said it planned to increase the capacity to 150,000 units a year by 2030 to meet demand in the country and Asean, which is expected to keep growing.