Foxconn is a former General Motors in Ohio for Lordstown Motors and another partner Fisker Inc under a deal announced on September 30th. Manufactures electric vehicles (EVs) at the (General Motors) plant.
Lordstown Motors, a predicament electric vehicle maker that became a public company through a merger with a special purpose acquisition company (SPAC), joined Foxconn on September 30 to sell its 6.2 million square feet factory. He said he had reached a non-binding agreement. Lordstown purchased the factory from General Motors in 2019.
Under the unfinished agreement, Foxconn will pay $ 230 million for factory purchases. The transaction does not include some assets such as Lordstown’s hub motor assembly lines, battery modules, packaging lines, or specific intellectual property rights. Foxconn will also buy $ 50 million worth of Lordstown common stock.
The two companies have also announced that Foxconn will also negotiate a contract production contract to assemble Lordstown’s full-size pickup truck Endurance at the plant. The contract for contract production is a condition for completing the factory purchase. The two companies have also agreed to consider licensing agreements for additional pickup truck programs.
This deal is in the midst of Lordstown’s critical moments. The cash-deficient company turned to SPAC, which made a series of failures in early 2021. Lordstown was a long-time executive in the automotive industry in August, inviting Carl C. Icahn, a former CEO of the holding company, Daniel A. Ninivaggi, as CEO and executive officer. board. Prior to this nomination, the company had months of turmoil, including the resignation of Lordstown founder and CEO Steve Burns. CFO Julio Rodriguez also said after the dull first-quarter earnings, when it became clear that the company was spending more money than expected and couldn’t reach its previously expected Endurance production. I resigned.
Related article: Lordstown Motors significantly lowers production outlook for electric pickup trucks, but still needs more cash?
The two companies said in a statement that the purpose of the alliance is for Lordstown Motors and Foxconn to seize the growing market opportunities for scalable electric vehicle production in North America. This includes an existing partnership with Foxconn’s EV maker Fisker Inc (Lordstown and Fisker are separate companies and have no relationship at all).
In May, Fisker signed a contract with Foxconn to collaboratively develop and produce a new EV under a program called Project PEAR. Project PEAR’s vehicles, which are an acronym for Personal Electric Automotive Revolution, will be sold under the Fisker brand in North America, Europe, China and India. Production preparations are expected to begin in the United States by the end of 2023 and will go into full-scale production in 2024, Fisker said in an interview with TechCrunch in August.
Related article: Fisker and Foxconn’s EV partnership is “faster than expected,” Fisker CEO said
Fisker didn’t reveal where it will be produced in the United States, but said in an interview that it might eventually be Foxconn.
Fisker issued a statement on September 30th welcoming the news from Foxconn.
“Achieving the program’s key objectives, including time to market, a well-developed supplier ecosystem, and overall cost goals, was a key factor in the decision to produce in Ohio,” said Henrik Fisker. Mr. Fisker) said in an email statement. “Since we partnered with Foxconn in early 2021, we have worked closely with all aspects of Project PEAR, including design, engineering, supply chain and production. Fisker’s promise to mass produce in the United States , This agreement has taken an even more important step. ”
Fisker is also working on a vehicle program with another consignment producer. The Fisker Ocean SUV will be assembled in Europe by car consignment manufacturer Magna Steyr. Fisker reiterated at its second-quarter press conference that production is expected to begin in November 2022 as planned. Delivery will begin in Europe and the United States in the latter half of 2022, with monthly production capacity of more than 5,000 planned by 2023. Delivery to Chinese customers is also expected to begin in 2023.