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Lordstown Motors reaches deal with Foxconn to work jointly on electric vehicle programs

Foxconn announced that it will purchase approximately $50 million of Lordstown Motors' common stock at a price of $6.8983 per share.

LORDSTOWN, Ohio — Editor's Note: The above video features previous reporting on this story

Lordstown Motors has announced that it has reached agreement with Taiwan's Hon Hai Technology Group (Foxconn) to work in partnership on Lordstown Motors’ electric vehicle programs.

In a joint release sent out on Thursday, Foxconn announced that it will purchase approximately $50 million of Lordstown Motors' common stock at a price of $6.8983 per share.

Subject to a definitive agreement, Foxconn would 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.

Once an agreement is finalized, Lordstown Motors would then 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.

“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. 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," said Daniel Ninivaggi, Chief Executive Officer of Lordstown Motors Corp. in a statement.

On Thursday morning, Bloomberg reported that Foxconn was buying the former General Motors factory. Foxconn is the world’s largest electronics manufacturer and a supplier to companies like Apple. It had previously announced a $10 billion investment in Wisconsin to make TV screens but the deal didn’t go through.  

"We look forward to sitting down if this does go through. I’m not sure if they’ll ink it tomorrow, next week or next year, but we’re very optimistic," Lordstown Mayor Arno Hill told 3News prior to the deal with Foxconn being announced.

For Lordstown Motors, it’s been a bumpy ride. They’ve been dealing with a number of issues since the company bought the former General Motors plant two years ago. Less than a week after Lordstown Motors said the company may not be able to continue operations, the CEO and CFO resigned from their leadership roles. Later in July, the company did get a boost by announcing a private equity firm had invested $400 million.  

Back in June, Lordstown Motors gave a tour of its plant --- and rides in prototypes of its “Endurance” trucks. Officials said then they would plan to begin building trucks in September and deliver the first ones to commercial customers in December.

“The devil is in the details, but I think this could be potentially good for Northeast Ohio,” said Michael Goldberg, Case Western Reserve University Assistant Professor of Design and Innovation at the Weatherhead School of Management. He expressed some concern about Foxconn’s failures in Wisconsin, but sees Foxconn’s move as possibly taking advantage of a “fire sale” at cash-strapped Lordstown Motors, in order to purchase an already existing facility instead of building new.

Still, Goldberg sees reason for optimism. “Because it is a distressed situation at Lordstown, this could be interesting to get it on the right foot,” he said. 

Foxconn had previously entered into a deal with another electric vehicle startup, Fiskar, to build its models. Under the deal with Lordstown Motors, Foxconn will also build Fiskar models at the Ohio plant.

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