Lordstown Motors Corp., (“Lordstown Motors” or “LMC”), an original equipment manufacturer (OEM) of electric light duty trucks focused on the commercial fleet market, today announced that it has closed the sale of its Lordstown facility and signed a contract manufacturing agreement and joint venture agreement for product development with affiliates of Hon Hai Technology Group.
As previously disclosed, on November 10, 2021, Lordstown Motors and Foxconn entered into an Asset Purchase Agreement (“APA”) providing for the sale of LMC’s Lordstown, Ohio vehicle assembly plant to Foxconn for $230 million plus the reimbursement of certain operating and expansion costs from September 1, 2021 to the closing date. The transaction was subject to several conditions, including that the parties enter into a contract manufacturing agreement for LMC’s flagship vehicle, the Endurance, a full-size, all-electric pickup truck.
On May 11, the transactions under the APA were completed. Total proceeds to LMC were $230 million, plus the reimbursement of approximately $27 million in operating and expansion costs. In addition, Foxconn had previously purchased $50 million of LMC Class A common stock directly from the company. Concurrently with the closing, Foxconn and Lordstown Motors entered into a manufacturing supply agreement for the Endurance. Start of commercial production of the Endurance is targeted for the third quarter of this year, with the first commercial deliveries expected in fourth quarter. Foxconn will assume manufacturing operations at the Lordstown plant immediately with no interruption. Approximately 400 skilled and talented LMC employees will transition to employment with Foxconn. LMC will retain a presence in Lordstown, Ohio along with engineering and technical centers, as well as corporate staff, in Farmington Hills, Mich. and Irvine, Calif.
In connection with the closing of the APA, Foxconn and LMC also entered into a joint venture agreement to co-develop EV programs using Foxconn’s Mobility-in-Harmony (MIH) open-source EV platform. The new joint venture will be called MIH EV Design LLC and will be 55% owned by Foxconn and 45% by LMC. Foxconn is committing $100 million towards the new joint venture, including a loan to Lordstown for $45 million to support its initial capital commitment. The joint venture creates an innovative business model whereby LMC and Foxconn would jointly develop new electric vehicles, utilizing the MIH platform, for LMC in the North American commercial vehicle market and for other OEMs internationally.