LORDSTOWN, Ohio - Lordstown Motors has announced an agreement in principle with global technology company Hon Hai Technology Group (“Foxconn”)  to work jointly on Lordstown Motors’ electric vehicle programs in Lordstown Motors’ production and assembly plant here in the Valley.

According to a news release, Foxconn will purchase $50 million of Lordstown Motors’ common stock directly from Lordstown Motors at a price of $6.8983 per share, which Foxconn will retain for a specified period.

The companies say the agreement would allow Lordstown Motors to leverage the technology and manufacturing expertise of Foxconn, as Lordstown Motors continues plans to manufacture electric vehicles at its Ohio facility.

The goal of the partnership, according to the joint statement, is to present both Lordstown Motors and Foxconn with increased market opportunities in electric vehicle production in North America.

Under the agreement, Foxconn would purchase the 6.2 million square foot former GM Assembly plant in Lordstown, excluding Lordstown Motors’ hub motor assembly line, battery module and packing line assets, certain intellectual property rights for $230 million.

Foxconn would manufacture Lordstown Motors’ Endurance electric pickup truck at the Lordstown facility, while Lordstown Motors would provide Foxconn with certain rights with respect to future vehicle programs.

Concurrently with the closing under the definitive agreements, Lordstown Motors would issue warrants to Foxconn that are exercisable until the third anniversary of the closing for 1.7 million shares of common stock at an exercise price of $10.50 per share.

Both companies have agreed to explore licensing arrangements for additional pickup truck programs.

Lordstown Motors would sign a long-term lease for a portion of the existing facility for its Ohio employees, and Foxconn would offer employment to agreed-upon Lordstown operational and manufacturing employees.

Young Liu, Chairman of Hon Hai Technology Group said he has high expectations for the partnership.

“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,” said Liu. “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.”

According to a news release from Hon Hai Technology, the deal would also support Foxconn's partner and customer, Fisker Inc.

In May, Fisker signed framework agreements with Foxconn to develop a new breakthrough electric vehicle.

“We are excited about the prospect of joining forces with a world-class smart manufacturer like Foxconn and believe the relationship would provide operational, technology, and supply chain benefits to our company and accelerate overall scaled vehicle production and increase employment in the Lordstown facility,” said  Daniel Ninivaggi, Chief Executive Officer of Lordstown Motors. “ 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.”

 In connection with the announcement, the Company Lordstown Motors updated its production plan and financial outlook saying LMC still plans to build a limited number of vehicles for testing, validation, verification, and regulatory approvals during the balance of 2021 and the first part of 2022.

Lordstown Motors, which had been saying it planned to begin limited production in September, says it will provide an update on its production plan during the upcoming third-quarter 2021 earnings call currently slated for mid-November.

Although Lordstown Motors foresees no change in capital expenditures, the company reported as much as an additional $25 million in legal and professional fees, and another $10 to $20 million in production expenses.