Contract manufacturing of the Endurance by Foxconn at Lordstown facility with no interruption in operations
LORDSTOWN, Ohio – Lordstown Motors is an original equipment manufacturer (OEM), of electric light-duty trucks that are geared toward the commercial fleet market. This week it announced that it had closed the Lordstown facility sale and signed a joint venture agreement and contract manufacturing agreement with Hon Hai Technology Group (Foxconn) affiliates for product development.
As previously disclosed, Foxconn and Lordstown Motors entered into an Asset Purchase Agreement (“APA”) on November 10, 2021. This agreement provided for LMC’s Lordstown vehicle assembly plant to be sold to Foxconn for $230million plus reimbursement of certain operating costs and expansion costs between September 1, 2021 and the closing date. There were several conditions to the transaction, including the need for the parties to enter into a contract manufacturing arrangement for LMC’s flagship vehicle the Endurance, an all-electric pickup truck that is full-size.
The transactions made under the APA were complete on May 11. LMC received $230 million in total proceeds, with reimbursements of approximately $27 million for expansion and operating costs. Foxconn also purchased $50 million worth of LMC Class A common stocks directly from the company. Foxconn and Lordstown Motors also signed a manufacturing supply agreement to produce the Endurance. The commercial production of Endurance is expected to begin in the third quarter. Commercial deliveries are expected to start in the fourth quarter. Foxconn will immediately assume manufacturing operations at Lordstown’s plant without interruption. LMC’s skilled and talented employees will be transferred to Foxconn. LMC will continue to have a presence at Lordstown in Ohio, along with engineering and technical centers in Farmington Hills, Mich., and Irvine, Calif.
Foxconn and LMC signed a joint venture agreement in connection with the closure of the APA. This agreement allowed them to co-develop EV program using Foxconn’s Mobility-in-Harmony open-source EV platform. MIH EV Design LLC will be the new joint venture. Foxconn will own 55% of it and LMC will have 45%. Foxconn will invest $100 million in the joint venture. LMC also provided a $45 million loan to Lordstown to help with its initial capital commitment. LMC and Foxconn will jointly develop electric vehicles using the MIH platform. This joint venture is an innovative model that LMC and Foxconn can use to create new models.
Vehicles developed by MIH EV Design would be built for North America at the Lordstown, Ohio plant, and at other Foxconn contract-manufacturing locations around the world. OEMs will benefit from Foxconn’s flexible MIH platform and manufacturing footprint and supply chain to produce smaller quantities and faster time to market. LMC will have access to a scalable platform for vehicle development in North America through the joint venture. This platform will allow LMC to accelerate EV development, reduce product development costs, increase LMC’s product range, and provide a global engineering and product development expertise.