Lordstown Motors Corp. and global technology company Hon Hai Technology Group (Foxconn), have reached an agreement in principle to work jointly on Lordstown Motors’ electric vehicle programs in Lordstown Motors’ 6.2 million-sq.-ft. production and assembly plant in Lordstown, Ohio.
Lordstown Motors and Foxconn will use commercially reasonable best efforts to negotiate a definitive agreement pursuant to which Foxconn would purchase the Lordstown facility, excluding Lordstown Motors’ hub motor assembly line, battery module and packing line assets, certain intellectual property rights and other excluded assets, for $230 million.
The agreement between both companies would allow Lordstown Motors to leverage the technology and manufacturing expertise of Foxconn, as Lordstown Motors pursues the production of electric vehicles at its Ohio facility. The companies say the goal of the partnership is to present both Lordstown Motors and Foxconn with increased market opportunities in scalable electric vehicle production in North America.
Following the news that Taiwanese iPhone maker Foxconn acquired Lordstown Motors’ Ohio EV factory, Bakar Sadik Agwan, senior automotive consulting analyst at GlobalData, says the acquisition is a win-win for both parties:
“The acquisition is a milestone for Foxconn’s U.S. EV ambition which came to a standstill with uncertainty looming over the company’s Wisconsin’s manufacturing plant. The purchase of Lordstown Motors’ manufacturing site, which was a GM plant until 2019, will be a turnkey solution for Foxconn’s EV manufacturing that will give it handoff experience in the area. It indicates that a ready plant will garner ‘quick learning’ with ‘less investments’. The GM plant had a capacity to turn around up to 300K units annually, thus providing significant space for Foxconn to expand its capacity in the future.
“Lordstown Motors, which was in deep financial crunch and legal scrutiny recently, will revive with the fresh cash inflow from Foxconn. Lordstown Motors will leverage Foxconn’s technology, manufacturing and supply chain expertise to manufacture its Endurance pick-up truck for the U.S. market.
“As per GlobalData Automotive Intelligence Centre, the ex-GM plant had logged a production capacity of 58K units in 2019. Foxconn may aim 50K annual production – similar to what it committed in its Thailand plant – and expand in later years.
“With the deal, Foxconn may lead ahead of its schedule to manufacture EVs in the U.S. by 2023-end. Foxconn has been negating complexity in EV manufacturing and supply with its partnerships and vertical integration across the value chain. However, it will have to compete with the likes of Tesla, GM and Ford in the U.S. which aims front row in the domestic EV market.”