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Foxconn and Lordstown Motors enter strategic partnership
Lordstown Motors Corp. (LMC), a provider of electric light-duty trucks focused on the commercial fleet market, and EMS provider Hon Hai Technology Group (Foxconn), have entered into a definitive Asset Purchase Agreement regarding LMC’s facility in Lordstown, Ohio.
As previously disclosed, Lordstown Motors entered into an agreement with an affiliate of Hon Hai Precision Industries, also known as Foxconn, to jointly work on Lordstown Motors’ electric vehicle programs in the production and assembly plant in Lordstown, Ohio. Shortly after this Foxconn purchased USD 50 million of common stock directly from Lordstown Motors at a price of USD 6.8983 per share. LMC has agreed to sell the Lordstown facility to Foxconn, excluding certain assets such as the hub motor assembly line and battery module and pack lines, for USD 230 million. Foxconn itself has agreed to make a down payment of the purchase price of USD 100 million by November 18th, and subsequent down payments of USD 50 million on each of February 1st, 2022 and no later than April 15, 2022, a press release reads. The parties have also agreed to pursue a contract manufacturing agreement for the Endurance pickup truck, which must be entered into before closing—currently targeted by April 30th. Lordstown Motors and Foxconn will pursue a joint venture agreement to co-design and develop vehicle programs for the global commercial fleet market. “This partnership marks the commencement of integrating our resources with Lordstown Motors to develop Ohio into Hon Hai’s most important electric vehicle manufacturing and R&D hub in North America. 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,” says Young Liu, Chairman of Hon Hai Technology Group, in the press release. Daniel Ninivaggi, Chief Executive Officer of Lordstown Motors Corp., adds, “We are happy to have formed a strategic partnership with a company as innovative and forward-thinking as Foxconn. I believe in their EV strategy and look forward to substantial collaboration in the future. In my view, this transaction provides LMC 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.”