According to a deal announced on Thursday, Foxconn will produce electric vehicles at a former GM plant in Ohio for Lordstown Motors and its other partner Fisker Inc.
Lordstown Motors, the troubled maker of electric vehicles that merged with a special purpose acquisition firm to become publicly traded, announced on Thursday that it has struck a non-binding deal with Foxconn to sell its 6.2 million-square-foot factory. In 2019, Lordstown acquired the factory from General Motors.
The facility will cost Foxconn $230 million according to the unfinished contract. Certain assets, including the hub motor assembly line, battery module, and packing line assets, as well as specific intellectual property rights, are not included in the sale. Additionally, Foxconn will spend $50 million on common stock of Lordstown.
In order for Foxconn to construct Lordstown’s Endurance full-size pickup truck at the site, the businesses announced they will establish a contract manufacturing arrangement. Closing the site purchase is dependent upon a contract manufacturing arrangement being reached. The parties concur to look into licensing options for further pickup truck programs.
For Lordstown Motors, a struggling startup turned SPAC that made a number of mistakes early this year, the transaction comes at a crucial time. hired Daniel A. Ninivaggi joined the company’s board of directors in August and was appointed CEO. He has extensive experience in the automobile industry. The appointment came after months of turmoil at the company, which included the departure of its founder and CEO Steve Burns. CFO Julio Rodriguez resigned in the wake of a disappointing first-quarter earnings report that showed the company was using more capital than anticipated and had previously been unable to reach forecasted production numbers for its electric Endurance pickup truck.
According to the firms’ release, the agreement will provide Foxconn and Lordstown Motors with more market options for the scalable manufacture of electric vehicles in North America. This includes Foxconn’s current alliance with the electric vehicle manufacturer Fisker Inc. (Lordstown and Fisker are independent businesses that are unrelated to one another.)
As part of a project called Project PEAR, Fisker and Foxconn signed a contract in May to jointly design and produce a new electric vehicle. The Personal Electric Automotive Revolution (PEAR) car will be produced and distributed under the Fisker brand name in China, India, Europe, and North America. According to Fisker, pre-production in the United States is anticipated to start by the end of 2023 and then pick up in the following year.
Fisker withheld information about the U.S. manufacturing site. Fisker stated at the time that Foxconns will make the final decision.
Fisker released a statement on Thursday praising the Foxconn news.
Henrik Fisker stated in an email statement that achieving key program objectives including time to market, accessibility to a thriving supplier ecosystem, and overall cost targets were all significant reasons in the choice to site manufacture in Ohio. We have been collaborating closely on Project PEAR’s design, engineering, supply chain, and manufacturing ever since we signed the agreement with Foxconn earlier this year. With the signing of this deal, Fiskers’ commitment to mass production in the United States advances significantly.
Additionally, Fisker is working with a different contract manufacturer on a different car program. Magna Steyr, an automobile contract manufacturer, will assemble the Fisker Ocean SUV in Europe. The business stated during its conference call for the second quarter that the start of production is still scheduled to start in November 2022. Deliveries will start in Europe and the US in late 2022, and production capacity of more than 5,000 vehicles per month is anticipated to be reached in 2023. Deliveries to Chinese consumers are also anticipated to start in 2023.