Foxconn is one step closer to launching its automotive operations as it has officially acquired the Lordstown Motors vehicle assembly plant for $230 million. Foxconn has also agreed to manufacture the Lordstown Motors’ Endurance, an electric truck that could rival Rivian’s R1T. The Ohio plant was initially purchased by Lordstown Motors from GM back in 2019.
The plans were first announced in September, with the two companies confirming on Wednesday, November 10, that the framework deal will go ahead. It secures a much-needed lifeline for the ailing EV startup that is currently being investigated by the Securities and Exchange Commission for fraud.
The Ohio factory will be Foxconn’s first automotive plant but marks the second attempt to make inroads into U.S. manufacturing. In 2017 the Taiwanese supplier had plans to invest $10 billion into a 20 million square feet LCD manufacturing facility providing 13,000 jobs in the state of Wisconsin. However, Foxconn soon backtracked on those promises, reducing their spending to just $672 million, with only 1,454 new jobs.
The deal between Foxconn and Lordstown Motors will only close in April 2022. Foxconn has already bought $50 million in common stock from Lordstown at $6.8983 per share, reports Tech Crunch. A down payment of $100 million is expected by November 18, while a further two payments of $50 million are due in February and April next year. Foxconn will also get 1.7 million warrants to buy Lordstown common stock at $10.50 per share for the next three years.
In addition to manufacturing the Endurance EV pickup, the two companies will co-design and develop commercial fleet vehicles for both American and international markets. It also seems likely that Fisker’s PEAR will also be built at the Ohio plant.