Lordstown Motors, the EV start-up behind the troubled Endurance pickup, plans to sell its Ohio plant to Taiwanese electronics manufacturer Foxconn, best known in the west for producing iPhones. Foxconn plans to build vehicles in the same 6.2-million square foot plant, which Lordstown itself bought from GM in 2019, and which produced the Chevrolet Cruze until that model’s demise the same year.
The non-binding agreement in principle was announced just a few days ago, formally called a “partnership to work jointly on scalable electric vehicle programs” by the EV start-up. What’s more, Foxconn plans to produce vehicles for Fisker at the plant.
Under the terms of the expected deal, Foxconn will pay $230 million for the plant and will also purchase $50 million in Lordstown common stock. Lordstown notes that a condition to closing the facility purchase is negotiating a contract manufacturing agreement, with the start-up adding that it would also agree to give Foxconn certain rights in regards to future vehicle programs and will also explore licensing agreements for other pickup truck programs.
“We have high expectations through this partnership that we will be able to successfully integrate our resources with Lordstown Motors,” said Young Liu, chairman of Hon Hai Technology Group. “In addition to achieving the goal of moving ahead our timeline to establish electric vehicle production capacity in North America, it also reflects Foxconn’s flexibility in providing design and production services for different EV customers. This mutually beneficial relationship is an important milestone for Foxconn’s EV business and our transformation strategy. I believe that the innovative design of the Endurance pickup truck, with its unique hub motors, delivers an advantageous user experience and has manufacturing efficiencies. It will undoubtedly thrive under our partnership and business model.”
The planned sale of the plant follows a tumultuous year at Lordstown, which already saw the departure in June of its CEO Steve Burns and CFO Julio Rodriguez as the company continued to miss targets amid an admission in a regulatory filing that it didn’t have enough money to begin production of the truck, and also amid reports that it had misrepresented the number of firm orders it had for its pickup.
The company gained a new CEO in August, with Daniel A. Ninivaggi stepping into the role.
“The partnership would allow Lordstown Motors to take advantage of Foxconn’s extensive manufacturing expertise and cost-efficient supply chain, while freeing up Lordstown Motors to focus on bringing the Endurance to market, developing service offerings for our fleet customers and designing and developing innovative new vehicle models,” Ninivaggi said.
This is far from Foxconn’s first attempt to break into automotive manufacturing, as the company has worked with other partners on EV tech, but what exactly Foxconn will gain with the plant and with the Endurance remains to be seen. As a number of industry observers have noted, getting the truck to production won’t necessarily produce the demand for it a year or more from now, as the former CEO’s conflicting statements regarding order numbers have just demonstrated earlier this year, while the tricky hub motor technology is not something demanded either by EV buyers at the moment. As such, even with Foxconn’s ownership of the plant and future production of the Endurance, the Endurance risks being an answer to a question few were asking, as GM and Ford are both months away from starting production of EV trucks of their own.
Fisker may end up being one of the main winners here in the longer term, even as demand for its own vehicles remains to be proven on a larger scale. But it won’t be the Ocean SUV that has been shown in recent months, which is expected to go into production in Europe, as Fisker plans to produce future models with Foxconn.
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