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Taiwan’s Foxconn, best known as the manufacturer of the iPhone, is now in the car manufacturing business.
Lordstown Motors on Wednesday said the $230 million deal announced in the fall to sell its sprawling 6.2 million-square-foot plant to Foxconn has closed.
The deal transfers to Hon Hai Technology Group — which trades under the Foxconn name — ownership of the former General Motors plant in Ohio along with 400 Lordstown manufacturing employees and the responsibility for assembling the battery-electric Endurance, a pickup roughly the size of the Chevrolet Silverado.
The sale effectively ends Lordstown Motors’ existence as an automaker and transitions the EV startup to becoming a product development and engineering outfit. Foxconn also said it is investing $100 million to create a joint venture affiliate that will work with Lordstown to engineer EVs based on Foxconn’s in-house developed platforms known as Mobility-in-Harmony.
“We have about 250 engineers, product development people mostly in Farmington Hills [Mich.] and Irvine [Calif.]. We have purchasing, quality, everything but manufacturing,” Lordstown CEO Daniel Ninivaggi told Automotive News.
The injection of cash from the deal might not be enough to ensure production of the Endurance begins on schedule this fall, Ninivaggi said. The company is working to raise an additional $150 million so it can keep its planned third-quarter start of limited production.
Lordstown this week reported its first-quarter loss narrowed to $89.6 million from a loss of $125.2 million a year earlier. It had a cash balance of $204 million, compared with $587 million a year earlier. It had received $200 million in down payments for its assets from Foxconn.
Even if the Endurance is delayed or even canceled, the Foxconn deal has implications beyond the truck. Fisker Inc., headed by designer Henrik Fisker, is already taking deposits for an affordable EV, code-named Pear, that is intended to be a high-volume model. Fisker says the Pear will be built at the Lordstown plant.
Also, Foxconn’s strong ties to Apple could eventually see the Taiwanese company manufacturing vehicles designed by the consumer electronics giant at Lordstown. Apple’s automotive intentions have been shrouded in secrecy, but plans appear to be moving forward. Last week, Apple hired away a senior executive from Ford.
Foxconn and Lordstown Motors have spotty records for meeting goals and deadlines. Foxconn in 2017 won major concessions from Wisconsin to build a $10 billion LCD screen plant in Mount Pleasant, near Kenosha, that would employ 13,000. It ended up opening a much smaller facility and does not say what it makes there.
Lordstown has been beset by typical EV startup problems involving significant cash needs, delays and technical issues. The company also has seen executive churn related to inflated claims for orders of the Endurance.
“I have a lot of faith in Foxconn’s strategy,” Ninivaggi said. “Anything in automotive is difficult, but they have the conviction. They are making investments all over the world. Foxconn looks at vehicles the way tech companies look at vehicles as platforms. And the innovation is increasingly in the software. And nobody is better at software and hardware integration than Foxconn.”