LORDSTOWN, Ohio — A new era for Lordstown Motors (LMC) is underway.
The electric truck manufacturer has announced that it has finalized an agreement to sell its facility to Taiwan's Hon Hai Technology Group (Foxconn). As a result of the deal, Foxconn will assume manufacturing operations at the Lordstown plant immediately and take over the employment of approximately 400 LMC workers.
Under the terms of the agreement, Lordstown Motors received $230 million, plus the reimbursement of approximately $27 million in operating and expansion costs.
According to a release from Lordstown Motors, the start of commercial production of the Endurance pickup truck is targeted for the third quarter of this year, with the first commercial deliveries expected in the fourth quarter.
In addition, Foxconn and LMC also entered into a joint venture agreement to co-develop electric vehicles using Foxconn's Mobility-in-Harmony (MIH) open-source platform. The new joint venture will be called MIH EV Design LLC and will be 55% owned by Foxconn and 45% by LMC. Foxconn says it is committing $100 million towards the new joint venture, including a loan to Lordstown for $45 million to support its initial capital commitment.
"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, in a statement. "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. I have always been a strong believer in what Foxconn is doing to accelerate the adoption of electric vehicles and we are proud to be their partner."
In late September of 2021, Lordstown Motors announced an agreement with Foxconn to work in partnership on LMC’s electric vehicle programs. Foxconn agreed to purchase the Lordstown facility, excluding Lordstown Motors’ hub motor assembly line, battery module and packing line assets, certain intellectual property rights and other excluded assets, for $230 million. The sale was made official in November.
The two sides agreed to a deadline of May 14, 2022 to complete the sale. Lordstown Motors announced on Monday that the deadline with Foxconn had been extended to May 18.
While negotiations were continuing, LMC announced on Monday that it lost nearly $90 million during the first three months of 2022. According to CNBC, Lordstown’s stock fell nearly 19% in early trading after the news was released to a new all-time low of $1.55. The shares recovered somewhat as the day went on, ending Monday’s session at $1.78, down 6.5%.
CNBC reports that Lordstown Motors' shares surged more than 35% in after-hours trading following the agreement becoming finalized.
Rep. Tim Ryan, whose district includes Lordstown, tweeted out the following after the announcement: "Congratulations to both Lordstown Motors and Foxconn on this monumental investment in our workers, our community, and the future of electric vehicle manufacturing in the United States. I stand ready to do everything in my power to support this transition."
LMC said previously that if the deal had fallen through, it would have be required to refund $200 million in down payments made by Foxconn over the last several months.
Previous Reporting:
- Lordstown Motors announces $90 million first quarter loss as Foxconn deal deadline looms
- Investors flee Lordstown Motors again on thin Endurance forecast
- Lordstown Motors agrees to sell plant to Foxconn for $230 million
- Lordstown Motors reaches deal with Foxconn to work jointly on electric vehicle programs
