Lordstown Motors Corp agreed to sell a substantial stake and give two board seats to manufacturing partner Foxconn Technology Group (富士康科技集團), replacing a previous arrangement for electric vehicle (EV) production with a new deal.
Foxconn, known in Taiwan as Hon Hai Precision Industry Co (鴻海精密), is to invest as much as US$170 million in the company through the purchase of preferred stock and 18.3 percent of common shares, a statement said on Monday.
The transaction will require a review by the Committee on Foreign Investment in the US (CFIUS).
Photo: Ann Wang, Reuters
The move deepens ties between the two companies, giving Foxconn a sizeable voting interest over the next two years as they pursue a newly announced EV development program together.
Lordstown has sought to build its Endurance electric pickup with capital from Foxconn, which has had ambitions to grow in the EV market.
“It’s strengthening the strategic partnership with Foxconn,” Lordstown Chairman Dan Ninivaggi said in an interview. “It’s another step in that direction. It also provides us capital for our jointly developed EV program.”
Foxconn, best known as the maker of Apple Inc’s iPhone, can buy 9.9 percent of the company without a CFIUS review, but would need US government approval to go beyond that.
Assuming the deal is approved, Foxconn could own up to 19.9 percent of the common voting stock.
Even if Foxconn buys more shares, it could not exceed that amount of voting stock, Ninivaggi said.
Foxconn completed a purchase of Lordstown’s Ohio factory earlier this year for US$230 million. The factory could ultimately produce 500,000 to 600,000 vehicles a year.
Lordstown also on Monday announced third-quarter results, revealing an operating loss of US$154.8 million.
Separately yesterday, Hon Hai’s MIH Consortium introduced its Project X program in Taipei.
Consortium CEO Jack Cheng (鄭顯聰) said that the consortium would unveil a three-seater EV prototype by the end of next year.
He said that six and nine-seater prototypes are also in the pipeline and would likely be unveiled in 2024.
Project X targets ride hailing and other mobility services in Southeast Asia, India and Japan. It aims to produce EVs with price tags of US$20,000 or lower.
Hon Hai in February also established joint venture Horizon Plus Co Ltd with Thailand’s state-owned oil supplier PTT Public Co to target the Southeast Asian EV market.
Additional reporting by CNA
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