Foxconn is buying Lordstown Motors’ Ohio EV factory for $230 million

Foxconn is buying Lordstown Motors’ Ohio EV factory for $230 million

iPhone assembler Foxconn is buying an automotive factory from struggling EV startup Lordstown Motors for around $230 million, the companies announced late Thursday. Foxconn says it has agreed to build Lordstown Motors’ electric pickup truck at the plant, which is where General Motors used to make the Chevrolet Cruze, and that the startup will remain a tenant there. Lordstown Motors will also “agree to provide Foxconn with certain rights with respect to future vehicle programs.”

The deal gives the Taiwanese conglomerate its first automotive factory, and a significant new presence in the United States — one that the company will use as it tries to establish itself as a global electric vehicle automaker. Foxconn previously announced a massive LCD panel factory in Wisconsin but has failed to live up to the myriad promises it made to that state.

As part of the deal, Foxconn is also buying $50 million worth of Lordstown Motors shares. The startup has recently admitted it needs to raise money quickly in order to survive, despite going public last year. News of the factory sale was first reported by Bloomberg early Thursday.

Lordstown Motors bought the 6.2-million-square-foot facility from General Motors in 2019 shortly after the Detroit automaker closed it down — a decision that drew the ire of then-president Trump. The startup previously announced in August that it was planning to rent out space at the factory in an effort to make money amid a serious cash crunch.

Since buying it, Lordstown Motors has put about $240 million worth of work into getting the factory ready to build its electric pickup truck, the Endurance. A spokesperson for Lordstown Motors declined to comment. Foxconn did not respond to a request for comment.

When GM sold the factory to Lordstown Motors, Trump praised the deal as “GREAT NEWS FOR OHIO!” But the startup — which was founded by the former CEO of Workhorse, another struggling EV startup — has run into an incredible amount of trouble ever since, despite going public and raising hundreds of millions of dollars in 2020. Lordstown Motors’ CEO was forced out earlier this year after he was caught lying about the veracity of the preorders for its truck. The startup has lowered its initial production goals for that truck, too. Both the Department of Justice and the Securities and Exchange Commission have launched probes into Lordstown Motors, and the company has said it only has enough money to survive through mid-2022.

Foxconn has spent much of the last year talking about expanding into electric vehicles as a way to diversify away from consumer electronics. It has struck deals with the likes of Geely, which is China’s largest private automaker, as well as Fisker Inc., a California EV startup that has yet to make an electric vehicle. Foxconn has also developed its own electric vehicle platform that it intends to sell to other automakers.

In March, Foxconn said it would reveal the location where it would build EVs with Fisker Inc. by July, but that self-imposed deadline came and went. The company had considered using the mostly empty complex it built in Wisconsin — another project that the Trump administration touted highly — but Fisker founder Henrik Fisker said he didn’t want to build his cars in a state that wouldn’t allow him to sell directly to consumers.

Foxconn said Thursday that, as part of the deal, Fisker Inc. will be allowed to make vehicles with the Taiwanese conglomerate in the Ohio factory.

zfastorg