Foxconn is shopping for Lordstown Motors’ Ohio EV manufacturing facility for $230 million
iPhone assembler Foxconn is shopping for an automotive manufacturing facility from struggling EV startup Lordstown Motors for round $230 million, the businesses announced late Thursday. Foxconn says it has agreed to construct Lordstown Motors’ electrical pickup truck on the plant, which is the place Normal Motors used to make the Chevrolet Cruze, and that the startup will stay a tenant there. Lordstown Motors may even “agree to offer Foxconn with sure rights with respect to future automobile packages.”
The deal provides the Taiwanese conglomerate its first automotive manufacturing facility, and a big new presence in the USA — one which the corporate will use because it tries to ascertain itself as a worldwide electrical automobile automaker. Foxconn beforehand introduced a large LCD panel manufacturing facility in Wisconsin however has did not reside as much as the myriad guarantees it made to that state.
As a part of the deal, Foxconn can be shopping for $50 million price of Lordstown Motors shares. The startup has lately admitted it wants to lift cash shortly with a view to survive, regardless of going public final 12 months. Information of the manufacturing facility sale was first reported by Bloomberg early Thursday.
Lordstown Motors purchased the 6.2-million-square-foot facility from Normal Motors in 2019 shortly after the Detroit automaker closed it down — a choice that drew the ire of then-president Trump. The startup beforehand introduced in August that it was planning to lease out area on the manufacturing facility in an effort to earn money amid a severe money crunch.
Since shopping for it, Lordstown Motors has put about $240 million price of labor into getting the manufacturing facility able to construct its electrical pickup truck, the Endurance. A spokesperson for Lordstown Motors declined to remark. Foxconn didn’t reply to a request for remark.
When GM offered the manufacturing facility to Lordstown Motors, Trump praised the deal as “GREAT NEWS FOR OHIO!” However the startup — which was based by the previous CEO of Workhorse, one other struggling EV startup — has run into an unbelievable quantity of hassle ever since, regardless of going public and elevating a whole lot of tens of millions of {dollars} in 2020. Lordstown Motors’ CEO was compelled out earlier this 12 months after he was caught mendacity concerning the veracity of the preorders for its truck. The startup has lowered its preliminary manufacturing targets for that truck, too. Each the Division of Justice and the Securities and Alternate Fee have launched probes into Lordstown Motors, and the corporate has mentioned it solely has sufficient cash to outlive via mid-2022.
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Foxconn has spent a lot of the final 12 months speaking about increasing into electrical autos as a approach to diversify away from client electronics. It has struck offers with the likes of Geely, which is China’s largest non-public automaker, in addition to Fisker Inc., a California EV startup that has but to make an electrical automobile. Foxconn has additionally developed its personal electrical automobile platform that it intends to promote to different automakers.
In March, Foxconn mentioned it will reveal the situation the place it will construct EVs with Fisker Inc. by July, however that self-imposed deadline got here and went. The corporate had thought of utilizing the largely empty complicated it inbuilt Wisconsin — one other venture that the Trump administration touted extremely — however Fisker founder Henrik Fisker mentioned he didn’t wish to construct his vehicles in a state that wouldn’t allow him to sell directly to consumers.
Foxconn mentioned Thursday that, as a part of the deal, Fisker Inc. can be allowed to make autos with the Taiwanese conglomerate within the Ohio manufacturing facility.
Replace September thirtieth, 8:32PM ET: Added new info from the press launch concerning the deal between Foxconn and Lordstown Motors, and adjusted the headline to mirror that the deal has been formally introduced.
