Foxconn officially announced on Wednesday that it was pushing ahead with a plan to buy a car assembly plant in Ohio, originally owned by GM, for $230 million from troubled electric car startup Lordstown Motors (Lodstown.
The partnership allowed Foxconn to take the first step in producing all-electric trucks and eased Lordstown's recent cash crunch. The start-up recently admitted that although it went public last year, it needed to raise money quickly to survive.
Loddtown shares rose more than 20% in after-hours trading after the news.
According to statements from the two companies, Lordstown agreed to sell the Lordstown plant to Foxconn for $230 million, excluding specific assets such as hub motor assembly lines, battery modules and battery pack production lines.
Foxconn will buy $50 million worth of common shares directly from Loddtown Motor at about $6.90 a share, the statement said.
In the future, Foxconn will make a down payment of $100m by November 18, followed by $50 million in February and April, with the final payment by the end of April.
Once the deal is finally completed, Foxconn will also receive 1.7 million warrants to buy more Rostown shares at $10.50 a share for an exercise period of three years.
Foxconn also agreed to reach a contract manufacturing agreement to assemble the first product for Lordstown cars, an all-electric pickup called Endurance.
"this partnership marks the beginning of the integration of our resources with Lostown Automotive, developing Ohio into Hon Hai's most important electric vehicle manufacturing and R & D center in North America." Said Liu Yangwei, chairman of Hon Hai, the parent company of Foxconn.
"when we focus on injecting Hon Hai's software and hardware capabilities in the information and communications industry into the rich automotive experience of the city and our partners," Liu Yangwei said, we will be able to provide customers with more real-time and efficient electric vehicle products. "
In 2017, Foxconn promised Wisconsin that it would invest $10 billion there to build a 20 million-square-foot LCD (LCD) plant and create 13000 jobs in exchange for $2.85 billion in state subsidies. The state reached the agreement under the leadership of former Governor Scott Walker (Scott Walker) and at the urging of the Trump administration.
However, Foxconn eventually said it could not deliver on its promise and significantly scaled back its local plans. Foxconn's local investment fell from $10 billion to $672 million, while the number of new jobs fell to 1454.
As part of the reduction plan, Foxconn reached an agreement with electric car company Fisker to produce electric cars in Mount Pleasant (Mount Pleasant), Wisconsin, over the next few years.
