Struggling electric-vehicle startup Lordstown Motors has been thrown a lifeline by Foxconn, the Taiwanese contract manufacturer famous for building the iPhone for Apple.
The two companies on Wednesday announced that they've finalized a previously announced deal that will see Foxconn purchase Lordstown's plant located in Lordstown, Ohio.
Foxconn will pay $230 million for the plant in multiple payments over the coming months. Foxconn has also already purchased $50 million worth of Lordstown's stock and has the option to purchase an additional 1.7 million shares at a price of $10.50. The option is open for three years.
Lordstown originally purchased the plant from General Motors in 2019, with the aim of building its first product, the Endurance electric pickup truck, at the site. However, the company hasn't been able to raise funds necessary to get production going, despite it going public in August via a SPAC deal.
Foxconn and Lordstown have also agreed to pursue a contract manufacturing agreement that will see Foxconn build the Endurance for Lordstown at the plant. Foxconn will likely be able to build the Endurance at lower cost than Lordstown, given its purchasing power, supply chain network, and logistics capabilities.
The two companies also plan to pursue a joint venture agreement to co-develop future commercial vehicles on Foxconn's own modular EV platform known as MIH. Unveiled in 2020, the platform is a modular design that contains in-house developed software and hardware systems, and is suitable for both car and SUV bodies.
“We are happy to have formed a strategic partnership with a company as innovative and forward-thinking as Foxconn,” Daniel Ninivaggi, CEO of Lordstown, said in a statement. “I believe in their EV strategy and look forward to substantial collaboration in the future.”
With the closing of the plant purchase agreement, it means Fisker's Project Pear EV will most likely also be built at the Ohio plant. Fisker CEO and founder Henrik Fisker in October said the Project Pear would be built at the plant, pending its successful sale to Foxconn. The Project Pear, which is expected to be priced below $30,000, will use a version of Foxconn's MIH platform. It's due to start production in 2024.