Executives of Lordstown Motors Corp. and Hon Hai Technology Group, the parent company of Foxconn, on May 11 signed agreements to have Foxconn buy Lordstown’s large Ohio manufacturing complex and take over the manufacturing of the Endurance electric pickup truck. The companies also have sealed a joint venture deal to design, develop and build other commercial EVs based on Foxconn platform technology.
Shares of Lordstown (Ticker: RIDE) jumped more than 30% to about $2 in after-hours trading on news of the deals. They had lost 80% of their value in the past year, cutting the company’s market value to just $300 million. Early this week, Lordstown CEO Dan Ninivaggi said he was still optimistic the two companies would reach an agreement after Foxconn had extended the negotiations deadline, meaning Lordstown wouldn’t have to return to Foxconn $200 million in downpayments – money Ninivaggi said Lordstown didn’t have on hand.
Per the companies’ agreements, Foxconn now owns the Lordstown factory—which was in the past owned by General Motors Corp. and which spans 6.2 million square feet—and has taken on 400 Lordstown workers as part of a contract manufacturing commitment of at least 18 months. The company has paid Lordstown the $30 million it still owed per the companies November preliminary agreement as well as roughly $27.5 million in estimated cost reimbursements.
Lordstown has retained some equipment and other assets and is keeping on staff about 250 people who are focused primarily on engineering, testing and validation. The company has signed up to lease space in the Lordstown complex, to which Foxconn reportedly plans to bring other auto manufacturing work. Those plans and Foxconn’s ability to procure materials at a lower cost than startup Lordstown can are expected to bring down the Endurance’s bill of materials, which today is quite a bit higher than the expected Endurance sale price.
On the product development side, the two companies have launched a JV–funded to the tune of $100 million by Foxconn, with $45 million of that amount being a loan to Lordstown—to develop other EVs using Foxconn’s Mobility in Harmony package of software, hardware and parts. Lordstown will have the right to market the JV’s vehicles in North America.
Foxconn, which already owns more than 7 million Lordstown shares bought at an average of nearly $7 apiece, also has received to buy another 1.7 million Lordstown shares for $10.50 each by May 2025.
