Shares of Foxtron Vehicle Technologies, a subsidiary of prominent iPhone supplier Foxconn, experienced a significant 9% drop during its market debut on Monday, reflecting concerns over potential challenges in the competitive electric vehicle (EV) market. The decrease in stock price can be attributed to various factors, including rising inflation and high interest rates, which have significantly increased the overall cost of car purchases.
Electric vehicle manufacturers are currently dealing with supply chain bottlenecks and facing price pressures, especially from industry leader Tesla, which has implemented price cuts this year. Instead of using direct quotes, we can state that Tesla CEO Elon Musk recently expressed caution in expanding factory capacity until interest rates decrease, aligning with similar sentiments expressed by General Motors and Ford.
According to an analyst from Mega International Securities, who preferred to remain anonymous due to firm policies, significant price reductions have been observed by major players like Tesla in the electric vehicle market. The analyst further adds that Foxtron incurred losses in both 2021 and 2022 and does not anticipate a positive change in the next two years.
Despite these challenges, Young Liu, the president of both Foxtron and Foxconn, maintains confidence in the company’s growth strategy. He firmly believes that Foxtron will consolidate its presence in Taiwan, leveraging its strong momentum in design and service in the electric vehicle sector. Additionally, Foxconn’s well-established business models will guide the company’s entry into key markets in North America and Southeast Asia.
This decline in the market debut sends a clear message that the competition within the electric vehicle market is fierce, with established players like Tesla leading the way. Electric vehicle manufacturers must navigate various issues such as supply chain disruptions and price pressures to succeed in this highly competitive environment. Foxtron will need to leverage its unique strengths and seize opportunities to thrive alongside industry peers.