Lordstown Motors and Foxconn complete the sale of their manufacturing plant

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Lordstown Motors announced last night that it has completed the sale of its manufacturing plant in Ohio to Foxconn after the two companies signed a contract manufacturing agreement and a joint venture agreement for product development.

After several years of delays and challenges that prevented the launch of its all-electric Endurance pickup truck, Lordstown announced in early October 2021 that it would sell its Lordstown, Ohio plant to Hon Hai Technology Group, more commonly known as Foxconn. .

Lordstown described significant cash flow problems that would likely not allow the business to operate until the end of June 2022, he said in a filing late last year. It said its ability to remain open through 2022 would depend “on its ability to complete development of its electric vehicles, gain regulatory approval, begin commercial-scale production and launch sales of these vehicles”. The deal with Foxconn to jointly develop electric vehicles and the decision to sacrifice some of its assets to stay open finally closed after several delays.

Earlier this week, Lordstown announced it would delay the sale of the Ohio manufacturing plant, extending the deadline by just four days. Lordstown also said it would need an additional $150 million in capital to begin boosting production of the Endurance pickup, which had been set aside for tooling improvements. Without the tooling upgrades, the cost of producing an Endurance pickup would have been more than the selling price of the vehicle.

Lordstown delays sale of factory to Foxconn, needs $150m capital for production

Yesterday, May 11, Lordstown and Foxconn completed the transactions that formed part of the asset purchase agreement, which was submitted on November 10, 2021:

“Total proceeds for LMC were $230 million, plus the reimbursement of approximately $27 million in operating and expansion costs. Additionally, Foxconn had previously purchased $50 million of LMC Class A common stock directly from the company. Along with the closing, Foxconn and Lordstown Motors entered into a manufacturing supply agreement for the Endurance.

Production of the Endurance pickup is still targeted for the third quarter, with first commercial deliveries scheduled for the fourth quarter.

“The closing of Foxconn’s APA and entering into a joint venture agreement for the development of new electric vehicles using Foxconn’s MIH platform are significant milestones for LMC,” said Lordstown CEO Dan Ninivaggi. . “Our strategic partnership with Foxconn provides LMC with a flexible, less capital-intensive business model, access to broad supply chain and software capabilities, and an efficient vehicle development platform to bring electric vehicles to market more quickly and more efficiently. I have always been a firm believer in what Foxconn is doing to accelerate the adoption of electric vehicles and we are proud to be their partner.

Disclosure: Joey Klender is not a shareholder of Lordstown.

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Lordstown Motors and Foxconn complete the sale of their manufacturing plant








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