Under an agreement announced Thursday, Foxconn will produce electric vehicles for Lordstown Motors and Fisker Inc. in an ex-GM factory in Ohio.
Lordstown Motors, the beleaguered electric vehicle company that became publicly traded via a merger with a special purpose acquisition company, said Thursday it reached a nonbinding agreement with Foxconn to sell its 6.2-million-square-foot factory. General Motors sold the factory to Lordstown in 2019.
Foxconn will pay $230million for the facility under the agreement. It has not yet closed. Certain assets, such as Lordstown's hub motor assembly line and battery module packing line assets, and certain intellectual property rights are not included in the deal. Foxconn will also purchase $50 million worth of Lordstown common stocks.
Both companies indicated that they would negotiate a contract manufacturing arrangement for Foxconn to build Lordstowns Endurance full size pickup trucks at the facility. A contract manufacturing agreement is required for the purchase of the facility. Both parties have agreed that they will explore licensing options for additional pickup truck programs.
Lordstown Motors is in a crucial moment after it was forced to close its doors. The company, which had been a cash-strapped startup that turned SPAC earlier this year, has made a series of mistakes. The company appointed Daniel A. Ninivaggi as its CEO and board member in August. He is a former Carl C. Icahns head and long-standing automotive executive. After months of turmoil at the company, which included the resignation of Steve Burns, its founder and CEO, the appointment was made. Julio Rodriguez, the CFO, resigned after a disappointing earnings report for the first quarter that showed the company was using more capital than anticipated and not able to meet previously forecasted production figures for its electric Endurance pickup trucks.
According to the announcements, the goal of the partnership is to provide Foxconn and Lordstown Motors with greater market opportunities for scalable electric vehicle production in North America. This includes Foxconn's existing partnership with Fisker Inc. (Lordstown Motors and Fisker, however, are distinct companies that have no connection.
Fisker and Foxconn signed an agreement in May to jointly develop and manufacture a new electric car under Project PEAR. Project PEAR, which stands to Personal Electric Automotive Revolution, is being produced in North America, Europe and China. It will then be sold as the Fisker brand in India, China, India, China, and Europe. Fisker stated that pre-production will begin in the U.S. at the end of 2023, and then increase in production through the next year.
Fisker did not reveal the U.S. manufacturing site. Fisker stated at the time that Foxconns would make the final decision.
Fisker released a statement on Thursday, welcoming Foxconn's news.
Henrik Fisker stated in an email that key program goals such as time to market and access to a strong supplier network were important factors in Ohio's decision to locate manufacturing. We have been closely working together on Project PEAR since we signed the agreement with Foxconn in January. This includes design, engineering, supply chain, and manufacturing. This agreement is another significant step in Fiskers commitment for volume manufacturing in the United States.
Fisker is also working with another contract manufacturer to develop a vehicle program. Magna Steyr, an automotive contract manufacturer in Europe, will build the Fisker Ocean SUV. In its second quarter earnings call, Magna Steyr reiterated that production will still begin in November 2022. Deliveries will start in Europe and the United States in mid-2022. The company plans to increase its production capacity to more than 5,000 vehicles per year by 2023. Delivery to China customers is also planned for 2023.
