July 18, 2024

Lordstown Motors Sells Its Production Facility to Foxconn For USD 230 Million

The US-based EV startup, Lordstown Motors announced on Thursday that it’s selling its automotive factory to Hon Hai Technology Group, also known as Foxconn, for USD 230 Million. Foxconn also said that it has bought the struggling electric truck’s plant, and jointly agreed to work on electric vehicle programs’. The manufacturing facility is 6.2 million square foot big based in Ohio.

Under the agreement, Foxconn will acquire USD 50 Million worth of Lordstown Motors shares. In addition to this, the automotive company will be able to utilize state-of-the-art technology and its manufacturing expertise that will help to scale its production and improve its market opportunities. Furthermore, the struggling EV startup “would also agree to provide Foxconn with certain rights with respect to future vehicle programs.” Both parties will also explore some pickup truck programs in the future.

In 2019, Lordstown Motors bought the production facility from General Motors. However, in August, announced that it is planning to rent out the space in the factory. It added that is in talks with “serious discussions with…several partners” that can share the production facility with the company. Lordstown Motors said that out of 6.2 million square feet, only 30% is used for the production of its electric trucks. The company’s plan to rent out the space comes after it said it will run out of cash by May 2022. When GM sold the plant to Lordstown Motors, Trump said that it is “GREAT NEWS FOR OHIO!”

On the other hand, Foxconn, a contractual manufacturing partner, has struck deals with various EV companies to expand its market further beyond consumer electronics. For instance, it signed a deal with China-based EV company, Fisker in May 2019. Even though it has successfully bought the EV production facility, its plans to downsize its efforts at the Wisconsin plant had put it in a tough spot. Earlier, it said that it will create 13,000 jobs; however, Reuters reported that it will generate only 1, 454 jobs.

Foxconn’s Executive Statement on Purchase

“We have high expectations through this partnership that we will be able to successfully integrate our resources with Lordstown Motors. In addition to achieving the goal of moving ahead our timeline to establish electric vehicle production capacity in North America, it also reflects Foxconn’s flexibility in providing design and production services for different EV customers,” said Chairman of Hon Hai Technology Group, Young Liu, in a statement. This production facility will also help Foxconn’s partners and clients to scale up their production.

“This mutually beneficial relationship is an important milestone for Foxconn’s EV business and our transformation strategy. I believe that the innovative design of the Endurance pickup truck, with its unique hub motors, delivers an advantageous user experience and has manufacturing efficiencies. It will undoubtedly thrive under our partnership and business model,” he added.

Lordstown Motors Statement on Sell

“We are excited about the prospect of joining forces with a world-class smart manufacturer like Foxconn and believe the relationship would provide operational, technology and supply chain benefits to our company and accelerate overall scaled vehicle production and increase employment in the Lordstown facility,” said Daniel Ninivaggi, Chief Executive Officer of Lordstown Motors Corp.

The partnership would allow Lordstown Motors to take advantage of Foxconn’s extensive manufacturing expertise and cost-efficient supply chain, while freeing up Lordstown Motors to focus on bringing the Endurance to market, developing service offerings for our fleet customers and designing and developing innovative new vehicle models,” he added.