According to an agreement announced Foxconn will construct electric cars for Lordstown Motors and its other partner Fisker Corporation at an old GM factory in Ohio. Lordstown Motors, the troubled electric vehicle manufacturer that went public through a merger with the special purpose acquisition (SPA) company, announced that it has struck a nonbinding deal with Foxconn company to sell its 6.2 million-square-foot factory. In 2019, Lordstown bought the factory from General Motors.
Foxconn is going to pay $230 million for the site under the terms of the deal, that is yet to be finalized. Certain assets, including Lordstown’s battery module, packing line assets and hub motor assembly line, as well as intellectual property rights, are not included in the agreement. Foxconn will also purchase $50 million in common stock from Lordstown. Foxconn will assemble Lordstown’s Endurance pickup truck (full-size model) at the factory, according to the firms.
A contract manufacturing deal must be reached before the facility purchase can be completed. The parties have consented to look into licensing options for more pickup truck programs. The transaction comes at a critical time for Lordstown Motors, which is a cash-strapped startup that turned SPAC earlier this year after several setbacks. Daniel A. Ninivaggi, a senior automotive executive as well as former head of Carl C. Icahn’s holding business, was appointed CEO and board member in August.
After months of turmoil at the firm, such as the departure of its founder and the CEO Steve Burns, the appointment was made. After a poor first-quarter financial report revealed the company was spending more money than projected and unable to meet previously forecasted production rates for the electric Endurance pickup vehicle, CFO Julio Rodriguez quit.
The purpose of the agreement, according to the firms, is to provide additional market prospects in scalable electric car production in North America for both Foxconn and Lordstown Motors. This includes Foxconn’s existing cooperation with Fisker Inc., an electric vehicle manufacturer. (Fisker and Lordstown are independent businesses with no ties.)
Fisker and Foxconn struck an agreement in May to co-develop and build a new electric car under the Project PEAR program. The Project PEAR automobile, which refers to Personal Electric Automotive Revolution, is going to be sold in China, North America, Europe, and India under the Fisker brand name. In an August interview with TechCrunch, Fisker said that preproduction will begin in the United States by the close of 2023 and build up into the next year. Fisker did not specify where the company’s production occurs in the United States. Fisker stated at the time that Foxconn will make the final choice.