Taiwanese consumer electronics manufacturer Hon Hai Precision Industry signed an agreement this week with Thai energy group PTT produce electric vehicles (EVs) in Thailand.

This followed a preliminary agreement signed by the two companies in May and will ultimately involve combined investments of between US$1bn and US$2bn in new EV manufacturing facilities in the Thailand eastern economic corridor.

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The new joint venture will design, manufacture and assemble and also produce key components, with an initial capacity to produce 50,000 EVs per year, rising to 150,000 units later. It aims to supply EVs across the region.

Hon Hai, through its newly established EV division Foxtron Vehicle Technologies, will contribute key EV technology including its MIH open EV platform and its electronics expertise.

The yet to be named joint venture company will have a registered capital of THB3.2bn (US$98m) and is expected to be fully registered in the fourth quarter of this year.

PTT said it would invest in the new company through its wholly-owned Arun Plus Company, taking a 60% stake, while Hon Hai is expected to make the investment for its 40% stake through its wholly-owned Lin Yin International Investments Company.

PTT CEO Auttapol Rerkpiboon said in a statement “this initiative will not only help increase our 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”.