Foxtron raised T$7.5 billion (about $235 million) in its initial public offering.
Foxtron Vehicle Technologies, a subsidiary of Taiwanese electronics giant Foxconn, experienced a decline in its shares during its market debut on Monday. This downturn was attributed to concerns about the challenges in the competitive electric vehicle (EV) market.
Initially, Foxtron’s shares fell by as much as 9%, but they later regained some ground, closing down 2.7%. This drop in share price resulted in a market capitalization of approximately $2.7 billion. The EV industry, including Foxtron, faces several headwinds such as inflation, rising interest rates increasing the cost of car ownership, supply chain issues, and pricing pressures.
An analyst from Mega International Securities commented on the industry’s situation, highlighting the impact of price cuts by major companies like Tesla. The analyst commented, “Foxtron has lost money in 2021 and 2022, and we don’t think it will turn that around in the next two years.”
Foxtron, a joint venture between Foxconn and the Taiwanese car manufacturer Yulon, currently serves only one client, Luxgen, which is a Yulon-owned brand. Despite these challenges, Young Liu, the chairman of both Foxtron and Foxconn, expressed optimism about the company’s growth strategy, stating that Foxtron aims to build its foundation in Taiwan. The company plans to leverage its EV design and service capabilities, along with Foxconn’s business models, to expand into North American and Southeast Asian markets.
In a separate matter, Liu did not comment on Foxconn’s contingency plans should its founder Terry Gou officially enter Taiwan’s presidential race. Gou has until Friday to register his candidacy with the election commission. Last month, China announced a tax probe into Foxconn, which some media attributed to Beijing’s displeasure over Gou’s political ambitions.