Deal makes Foxconn new operator of Lordstown Motors
Lordstown Motors and Foxconn announced on Wednesday that the electric truck manufacturer and the Taiwanese electronic manufacturer have completed an Asset Purchase Agreement to sell the Lordstown facility to Foxconn as well as enter into a joint venture for product development with Foxconn affiliates.
Under the agreement, LMC received $230 million as well as the reimbursement of $27 million in operating and expansion costs.
Foxconn and Lordstown Motors also announced a manufacturing supply agreement for the all-electric Endurance pickup truck, commercial production of which is targeted for the third quarter of this year, with the first commercial deliveries expected in the fourth quarter.
Foxconn will assume manufacturing operations at the Lordstown plant immediately with no interruption.
Approximately 400 LMC employees will transition to employment with Foxconn.
LMC will retain a presence in Lordstown along with engineering and technical centers, as well as corporate staff, in Farmington Hills, Mich. and Irvine, Calif, according to the news release.
In connection with the closing of the APA, Foxconn and LMC also entered into a joint venture agreement to co-develop EV programs using Foxconn’s Mobility-in-Harmony (MIH) open-source EV platform.
The new joint venture will be called MIH EV Design LLC and will be 55 percent owned by Foxconn and 45 percent by LMC.
Foxconn is committing $100 million towards the new joint venture, including a loan to Lordstown for $45 million to support its initial capital commitment.
The joint venture creates an innovative business model whereby LMC and Foxconn would jointly develop new electric vehicles, utilizing the MIH platform, for LMC in the North American commercial vehicle market and for other OEMs internationally.
Vehicles developed by MIH EV Design would be built for North America at the Lordstown, Ohio plant, and at other Foxconn contract-manufacturing locations around the world.
The objective is for users of Foxconn’s flexible MIH platform, manufacturing footprint, and supply chain to achieve production scale at lower volumes and with a shorter time to market.
The joint venture also leverages Lordstown Motors’ strong engineering and product development capabilities globally and provides LMC a scalable vehicle development platform in North America, accelerating EV development, reducing product development costs, and increasing the breadth of LMC’s product portfolio over time, according to the statement.
“The closing of the Foxconn APA and the completion of a joint venture agreement for the development of new electric vehicles using Foxconn’s MIH platform are important milestones for LMC,” said Daniel Ninivaggi, CEO of Lordstown Motors. “Our strategic partnership with Foxconn provides LMC with a flexible and less capital-intensive business model, access to broad supply chain and software capabilities and an effective vehicle development platform to bring EVs to market faster and more efficiently.”
Foxconn manufactures electronic products for companies around the world, including Apple, Nintendo, Sony, Google Pixel devices, and Microsoft Xbox consoles.
In June of last year, former Lordstown Motors CEO Steve Burns and Chief Financial Officer Julio Rodriquez resigned from the company.
Lordstown Motors was founded in 2018 by Steve Burns, former CEO of Workhorse Group.
Lordstown Motors became the owner of the former GM plant in Lordstown after signing a sales agreement with automaker General Motors in May 2019.