Lordstown Motors and Hon Hai Technology Group close deal on $230 million Ohio factory purchase and operating agreement, days ahead of a May 18 deadline.
Hon Hai Technology Group, better known as Foxconn, will operate the Ohio plant in a joint venture with Lordstown, slated to produce the Endurance pickup and other EVs in the future.
The Fisker Pear is expected to enter production at Lordstown in 2024, to be produced by Foxconn for EV startup Fisker.
EV truck startup Lordstown has completed a crucial deal with Taiwan's Hon Hai Technology Group, widely known as Foxconn, selling the former General Motors plant to the electronics giant seeking to gain a foothold in the EV industry. The closing of the $230 million sale came just in time to save Lordstown from having to refund Foxconn over $200 million, which would have depleted most of its cash reserves and most likely closed the possibility of putting its Endurance pickup into production, as the sale was wrapped up days before a May 18 closing deadline.
Among other things, Foxconn is now in the EV business with the signed joint venture agreement and manufacturing agreement. Foxconn will now use the plant to co-design and develop electric vehicle programs along with Lordstown, and also take a step toward building cars for EV startup Fisker. The Taiwanese tech giant will also invest $55 million in the joint venture, holding 55% of the shares.
"After the facility transfer completion, there will be approximately four hundred skilled and talented LMC employees that will transition to employment with Hon Hai," the electronics company said. "By collaborating with different automotive OEMs, Hon Hai will offer its employees in North America exciting and challenging opportunities to develop their career paths in the field of electric vehicles."
Foxconn will also work on bringing the Endurance pickup, first shown in the summer of 2020, into production later this year.
The truck, aimed at commercial customers, promises four in-wheel hub motors—something that we haven't seen from other automakers—producing a combined 600 hp. The model itself had faced some skepticism even prior to its reveal in the summer of 2020 (and prior the new auto industry realities of the pandemic), as well as plenty of controversy regarding the number of orders and reservations Lordstown claimed to have for the truck, leading to some corporate reshuffling in the past two years.
"By sharing expertise and integrating resources, the two parties will be able to help the OEMs in the supply chain to effectively and efficiently reduce Time to Market and Time to Cost, achieving the benefits of scale," Hon Hai noted.
The truck now faces additional headwinds in the form of competitors like the Ford F-150 Lightning, with more competitors on the way soon. Even with the Endurance now advancing toward production, it could now have a narrower window of opportunity for gaining market share than it may have had a couple of years prior.
Foxconn's fortunes, thankfully, are not tied solely to the success of the Endurance, as the tech giant is also expected to produce the Fisker Pear at the Ohio plant starting in 2024, in addition to other EV models.