Shares of Lordstown Motors Corp.
rallied more than 10% in the extended session Wednesday after the electric-vehicle maker cemented a deal to sell its plant to Foxconn for $230 million, providing Lordstown with much needed cash and giving the Taiwanese electronics contract maker a toehold in commercial EVs.
also known as Hon Hai Technology Group, makes a plethora of electronics for tech companies, including Apple Inc.’s
iPhone, and has a deal to make passenger EVs with Fisker Inc.
Foxconn has agreed to make a $100 million down payment on the Lordstown, Ohio, plant by Nov. 18, with additional $50 million down payments on Feb. 1 and no later than April 15. The balance is due at closing, the companies said.
The companies also have agreed to enter a contract manufacturing agreement for
Lordstown’s Endurance pickup truck. Lordstown and Foxconn will pursue a joint venture to co-design and develop vehicle programs for global commercial fleets, with both companies having the right to sell those EV programs in North America and internationally, they said.
Upon the deal’s closing, Foxconn will receive 1.7 million warrants to buy Lordstown common stock at a price of $10.50 a share.
Foxconn and Lordstown inked an in-principle deal in September.
The partnership marks the start of integrating resources and developing Ohio into Foxconn’s “most important electric-vehicle manufacturing and R&D hub in North America,” said Young Liu, Foxconn’s chairman.
“As we look to inject Hon Hai’s software and hardware capabilities in the information and communications industry with the wealth of automotive experience that resides in this town and our partners, we will be able to provide customers with more real-time and efficient electric vehicle products,” Liu said.
The deal provides Lordstown “a better opportunity to fulfill its original mission of satisfying the growing demand for electric vehicles, particularly in the underserved commercial market, with a more flexible business model,” Chief Executive Daniel Ninivaggi said in a statement.