Electric light-duty truck manufacturer Lordstown Motors has officially sold its 6.2-million-square-foot Lordstown, Ohio factory to Foxconn, the Taiwanese hardware manufacturing company best known for making Apple's iPhone. According to Lordstown, the $230 million deal will close by April 2013.
The terms of the deal align with the principle agreement between the companies on September 30. Foxconn then bought $50 million in common stocks directly from Lordstown for $6.8983 each share. Foxconn now has to pay $100 million as a down payment by November 18, and $50 million each in February and April, before closing on April 30, 2022.
According to a Lordstown statement, Foxconn also committed to a contract agreement to assist Lordstown in manufacturing its Endurance pickup truck. Both parties will work together to develop and co-design commercial fleet vehicles for North American and international markets. Foxconn will be issued 1.7 million warrants that allow them to purchase Lordstown's common stock for $10.50 each share over the next three-years, once the deal has been completed. Lordstown will retain its electric motor production lines and battery module, pack and assembly lines.
Foxconn and Fisker signed an agreement earlier this year to co-develop the new vehicle. This was under Fisker’s PEAR program in North America. Foxconn indicated that Fisker's vehicles would also be manufactured at Ohio's factory which Lordstown purchased from General Motors in 2019. Foxconn's first factory is now open and the company has a great chance to expand beyond manufacturing laptops and phones.
Lordstown is currently under investigation by the Securities and Exchange Commission and Department of Justice. A research firm had accused Lordstown of falsifying EV truck pre-orders. The company is also facing financial woes and the loss of many executive directors, including Rich Schmidt who resigned Wednesday morning. The deal could reduce Lordstown's raw material and component prices. Foxconn's strong supply chain network, logistics capabilities, and purchasing power allow it to reduce production costs and manage a volatile supply chain. Foxconn also has a strong expertise in software-hardware integration which is crucial for electric cars.
