Foxconn, the company known for manufacturing Apple iPhones, is buying an automotive factory from EV maker Lordstown Motors for around $230 million.
As per the deal, Foxconn will be building Lordstown Motors’ electric pickup truck at the plant. Further, the EV maker will remain a tenant there and has also agreed to “provide Foxconn with certain rights with respect to future vehicle programs.”
Additionally, Foxconn is also buying $50 million worth of Lordstown Motors shares. The startup has been struggling and had talked about the need to raise money quickly in order to survive, despite going public last year.
With this deal, Foxconn has now entered the automotive factory space and now has a significant presence in the United States. It seems that the Taiwan-based company will now try to establish itself as a global electric vehicle manufacturer.
The companies hope to complete a purchase agreement by 31st October and complete the deal by April 30. Foxconn has said that as part of the deal, Fisker Inc. will be allowed to make vehicles with the Taiwanese conglomerate in the Ohio factory.
Lordstown Motors had purchased a 6.2-million-square-foot facility from General Motors in 2019. Recently, it was planning to rent out space at the factory in an effort to make money amid a serious cash crunch.
The EV maker is facing lots of trouble. Its CEO was forced out after he was caught exaggerating pre-orders for its electric truck. The company has now lowered its initial production goals. The Department of Justice and the Securities and Exchange Commission have launched probes into Lordstown Motors, and the company is going through financial crises, with only have enough money to survive through mid-2022.
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