The $230 million deal announced last week between Foxconn and Lordstown Motors is more than just an agreement to buy the company’s Mahoning Valley manufacturing facility.
As part of the deal, Foxconn will buy $50 million in Lordstown Motors stock. The Taiwanese tech company will also get the rights to use Lordstown’s electric vehicle technology.
Mahoning Matters reporter Justin Dennis said the deal makes sense for Lordstown Motors, which has been struggling to get its electric pickups off the production line.
He said the electric vehicle maker has been open about the company’s cash crunch for months.
“They let investors know that they may not see 2023 unless they did something else. And in their most recent earnings call with investors, they said pretty much everything is on the table,” Dennis said.
Lordstown Motors 6.2 million-square-foot production plant, formerly owned and operated by General Motors, is one of the largest in the country.
With Foxconn angling for a foothold in America to get into electric vehicle production, Dennis sees a world where multiple different electric brands could be produced under one roof.
The two sides are currently negotiating the deal to allow Foxconn to produce a version of Lordstown Motors Endurance electric picup truck.
“Speculatively, it sounds like this will be the vehicle that Lordstown Motors intended to make, but the manufacturing of that vehicle would just be led by Foxconn rather than Lordstown Motors," Dennis said. "Foxconn being the entity with the resources and obviously will be the entity that owns the plant at that point.”
Lordstown as an EV hub
But will the vehicles have a Foxconn or a Lordstown Motors badge once they are available to the public?
“I think it's still a little too early to tell,” Dennis said.
In fact, the future of the production facility could include another brand of EV.
“They had already established a partnership with Fisker Inc., which is another electric vehicle maker to manufacture a vehicle for them,” Dennis said.
Though the Fisker EV is not expected for production until at least 2023, Dennis speculates that vehicle could be made alongside the Endurance.
One appealing aspect of the deal for Foxconn is the access to Lordstown Motors’ hub technology, Dennis said.
“They believe in the hub motor design, which is commercially untested at this point,” he said.
“Really the only moving parts essentially are the four wheels, and everything is fed off a battery pack so there's no drivetrain,” Dennis said.
What about jobs?
The former GM plant employed thousands at one time across multiple shifts.
Lordstown Motors’ pitch to the community has been to revitalize the region through EV and battery technology, dubbing it the future "Voltage Valley."
Right now the company employs about 500 people.
“I was told by a spokesperson for Lordstown Motors that they expect a great deal of the current Lordstown Motors employees to be offered a job with Foxconn,” Dennis said.
But not everyone is expected to make the transition.
“So, could that number conceivably rise if they're making the Fisker car, the Endurance truck, and perhaps more electric vehicles under the Foxconn? Conceivably, yeah,” Dennis said.
But he said there’s still a lot of hurdles to clear before they start to hire more workers.
“Lordstown Motors expected production of the Endurance to begin late September, so just at the end of last month," he said. "And at the same time that they announced the Foxconn deal, they also announced that they would have to go back to the drawing board and figure out how this deal could change their production schedule.”
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October 05, 2021 at 04:00PM
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