Lordstown Motors confirms plan to sell Ohio plant to Foxconn
Lordstown Motors Corp's Endurance truck (Lordstown Motors/Lisa Acierno/Handout via REUTERS)
The potential deal would give the electric truck maker some cash while allowing them to lease back part of the facility
Electric truck startup Lordstown Motors announced Thursday evening that it is in discussions with iPhone manufacturer Foxconn to sell its Ohio factory, confirming reports from earlier in the day.
The firms are still hammering out the details, but said in a joint press release that the potential deal would involve Foxconn purchasing the 6.2 million-square-foot facility for $230 million and manufacturing Lordstown's Endurance pick-up trucks under a separate agreement.
Foxconn, also known as Hon Hai Technology Group, would also purchase roughly $50 million in Lordstown common stock.
The prospective injection of cash from the deal could be a lifeline for Lordstown, which is trying to bring its Endurance to the market this year but has warned investors in the past that it needs more capital to do so.
"Following the closing under the definitive agreements," the companies' press release reads, "Lordstown Motors would enter into a long-term lease for a portion of the existing facility for its Ohio-based employees, and Foxconn would offer employment to agreed upon Lordstown operational and manufacturing employees."
Lordstown Motors assembly line (Fox Business)
"We are excited about the prospect of joining forces with a world-class smart manufacturer like Foxconn and believe the relationship would provide operational, technology and supply chain benefits to our company and accelerate overall scaled vehicle production and increase employment in the Lordstown facility," Lordstown CEO Daniel Ninivaggi said in a statement. "The partnership would allow Lordstown Motors to take advantage of Foxconn’s extensive manufacturing expertise and cost-efficient supply chain, while freeing up Lordstown Motors to focus on bringing the Endurance to market, developing service offerings for our fleet customers and designing and developing innovative new vehicle models."
The agreement also makes sense for Foxconn, the world's largest manufacturer, as it seeks to grow its footprint in the electric vehicle industry.
Foxconn already has a partnership to make an electric vehicle with another auto startup, Fisker.
Signage outside Lordstown Motors Corp. headquarters in Lordstown, Ohio, U.S., on Saturday, May 15, 2021. Lordstown Motors Corp. is scheduled to release earnings figures on May 24. Photographer: Dustin Franz/Bloomberg via Getty Images (Getty Images)
Ninivaggi told The Wall Street Journal that the terms of Lordstown's deal with Foxconn are expected to be reached by the end of October, with a closing set for April of 2022.
FOX Business' Gary Gastelu contributed to this report.
SOURCE: FOX BUSINESS