Hon Hai Precision Industry Co., Ltd, known as Foxconn Technology Group (TSE: TW), a Taiwanese multinational electronics contract manufacturer, revealed Wednesday that it is on track to acquire an assembly plant, which previously belonged to Lordstown Motors, for a total of USD230 Million. Furthermore, Foxconn has purchased USD50 Million worth of Lordstown’s stock and has the opportunity to buy an additional 1.7 Million shares at USD10.50 per share for the next three years.
Young Liu, Chairman of Hon Hai Technology Group, commented “We have high expectations through this partnership that we will be able to successfully integrate our resources with Lordstown Motors. 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. This mutually beneficial relationship is an important milestone for Foxconn’s EV business and our transformation strategy. I believe that the innovative design of the Endurance pickup truck, with its unique hub motors, delivers an advantageous user experience and has manufacturing efficiencies. It will undoubtedly thrive under our partnership and business model.”
Lordstown is experiencing some relief from the deal’s capital, while the collaboration provides Foxconn the ability to begin producing fully electric trucks. Lordstown shares rose over 13% during after-hours amid the news.
The two companies intend to enter a joint venture agreement in order to develop commercial vehicles on Foxconn’s personal modular EV platform known as MIH. The platform is a modular design that consists of in-house developed software and hardware systems and is to be used in cars and SUV models.
“We are happy to have formed a strategic partnership with a company as innovative and forward-thinking as Foxconn,” Daniel Ninivaggi, CEO of Lordstown, said in a statement. “I believe in their EV strategy and look forward to substantial collaboration in the future.”
Foxconn is set to make a down payment of USD100 Million by November 18, followed by payments of USD50 Million in both February and April as well as a final payment before the end of April.