Foxconn has struck a deal to acquire its first electric vehicle manufacturing plant in North America, part of USD 280 million in deals with US electric vehicle startup Lordstown Motors that also include a share purchase.
The Taiwanese tech giant said on Friday morning it will take a roughly 4% stake in Lordstown for around USD 50 million and buy the American company’s manufacturing complex in Ohio for USD 230 million. Foxconn will produce Lordtown’s Endurance full-size pickup truck as part of the facility purchase agreement, the two companies said.
The deals are expected to provide much-needed cash for Lordstown.
The 6.2 million sq ft (575,000 sqm) facility in Ohio, which Lordstown previously bought from General Motors, will be Foxconn’s first car manufacturing foothold in North America. The facility acquisition agreement also includes land, equipment, and an undisclosed number of employees from Lordstown, which will give Foxconn a jump-start to begin its car manufacturing plans sooner, a person familiar with the situation told Nikkei Asia.
The agreement excludes Lordstown’s hub motor assembly line, battery module and packing line assets, certain intellectual property rights, and certain other assets, according to the companies.
Foxconn is expected to start making the Endurance as early as April next year, the person added, and the facility is expected to help realize the iPhone assembler’s plans to start producing American EV startup Fisker’s second EV model by the fourth quarter of 2023. If the Lordstown project succeeds, it will also boost Foxconn’s car manufacturing know-how and increase the company’s credentials in the EV industry.
“In addition to achieving the goal of moving ahead our timeline to establish electric vehicle production capacity in North America, it also reflects Foxconn’s flexibility in providing design and production services for different EV customers,” Foxconn chairman Young Liu said in a joint press release. “This mutually beneficial relationship is an important milestone for Foxconn’s EV business and our transformation strategy.”
Foxconn also plans to build an EV manufacturing facility in Thailand by 2023 in collaboration with Thai oil and gas company PTT for the Southeast Asian market.
Liu earlier this year said the company was considering Mexico or Wisconsin—Foxconn has existing facilities in both places—to build its first car production site in North America, mainly for Fisker but also other future clients. However, negotiations with Wisconsin have not yielded any significant progress in months due to the state’s rules barring automakers from selling directly to consumers.
Formally traded as Hon Hai Precision Industry, the Taiwanese company has been aggressively venturing into the nascent EV industry in the past two years as it looks for new growth drivers to offset the slowing smartphone industry. Foxconn has a joint venture with Stellantis, owner of Fiat and Chrysler and the global No. 4 automaker, as well as a joint venture with China’s Geely.
Its collaboration with Byton, however, has been put on hold for months due to the Chinese EV startup’s deteriorating financial situation and complex shareholder structure, Nikkei Asia has reported.
Check this out: China’s Congested Automobile Sector
This article first appeared on Nikkei Asia. It’s republished here as part of 36Kr’s ongoing partnership with Nikkei.