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Lordstown Motors to sell Ohio plant to Foxconn for $230 million


Lordstown MotorsLate Thursday, companies announced that the company had entered into an In-Principle Agreement to Sell its Ohio Massive Assembly Plant to Foxconn for $230 Million.

The Taiwan-based electronics manufacturer, a contract producer, will build Lordstown Motors’ first product, an electric pickup truck named the Endurance. This is the same vehicle that Lordstown Motors was planning to manufacture and market beginning next year.

Foxconn also sold the plant, which was known as Hon Hai Technology GroupFoxconn, in turn, will contribute capital to the electric vehicle startup that has been left with little cash. Foxconn has also signed a deal to start-up FiskerIn the future, EVs will be produced.

Lordstown Motors’ partnership with Foxconn would enable Lordstown Motors take advantage of Foxconn’s vast manufacturing expertise, cost-efficient supply chains, while Lordstown Motors can focus on the Endurance, developing services for our fleet customers, as well as designing and developing new vehicles,” Daniel Ninivaggi, Lordstown CEO, stated in a release.

Bloomberg first reportedAlthough the two companies appeared to be “near agreement” in the morning, Lordstown stock rose as high as 21% Thursday. The shares then retreated to $7.98 on Friday, an 8.4% increase. After-hours trading saw the stock rise another 7.4%.

Foxconn will also purchase approximately $50 million worth of Lordstown stock under the deal. The company plans to lease a part of the former on a long-term basis. General MotorsFoxconn and Lordstown will provide jobs for operational and manufacturing workers.

Young Liu (chairman of Hon Hai Technology Group) stated in a statement that “We have achieved the goal of moving forward our timeline for establishing electric vehicle production capacities in North America.”

Lordstown is strapped for cash and trying to make ends meet. begin productionThe Endurance. In June, the company stated that there were “substantial doubt”Concerns about the company’s ability to operate as a continuing concern for the next year, due to financial problems with Endurance manufacturing.

Foxconn Electronics, an electronics contractor based in Taiwan is well-known for producing iPhones. But it wants to increase its production of electric vehicles.

On June 21st, 2021, workers install the door hinges on the body of an Endurance electric pickup truck at Lordstown Motors’ assembly plant in Ohio.

Michael Wayland/CNBC

General Motors had closed the Lordstown facility, measuring 6.2 million sq. ft., as part of a restructuring program. In 2019, the EV startup purchased it from them. The facility was purchased by the start-up for $20million, a fraction its total value. GM assisted both the company and their suppliers financially.

GM has 7.5 millions shares of Lordstown Common Stock Class A. The shares were received in return for equity value $75 million in the electric vehicle company. Most of these services were related to the sale and in-kind.

Lordstown has other financial problems than Lordstown. is under investigationThe Securities and Exchange Commission and Department of Justice questioned the deal. They also criticized potential misleading statements made by ex-management, such as Steve Burns (CEO) and founder of company).

After an investigation revealed “issues concerning the accuracy of some statements”, Burns and his chief financial officer left Lordstown, a SPAC-backed firm in June. This was due to concerns about Lordstown’s preorders. The main concern was the severity of those orders as well as who made them.

Hindenburg Research was accused by short-seller Hindenburg Research of misleading investors. Hindenburg Research used “fake orders” to raise capital and purchase Endurance, an electric pickup. According to the short seller, production of the pickup is still years away. Lordstown maintains that the pickup will be made in September.

Lordstown had previously stated that an internal investigation concluded Hindenburg’s report was “in significant respects false” and misleading.