Foxconn Increases Lordstown Investment

Matt Posky
by Matt Posky
foxconn increases lordstown investment

If you’ve been following Lordstown Motors, you’ll undoubtedly know that the promising automotive startup has had a lot of trouble getting its electrified truck to market. With bankruptcy looming, the would-be automaker sold the all-important factory it had purchased from General Motors (at a discount no less) to Foxconn and created a new joint venture with the Taiwanese business. But it’s looking like more support will be needed before any vehicles manifest, so Foxconn is upping its investment by $170 million.

Originally intended to go into production in 2020, the Endurance pickup has been repeatedly stalled while the company sat on 12 million in licensing rights it had to pay to effectively build a remixed Workhorse W-15. In the interim, Lordstown engaged in one of those often-suspect reverse mergers with a special-purpose acquisition company (SPAC) named DiamondPeak Holdings. This resulted in an estimated valuation of $1.6 billion and was released from the mortgage obligations tied to the Ohio factory where General Motors used to build the Chevrolet Cruze.

The following year, Lordstown Motors endured several embarrassingly public failures and became the target of infamous short-seller and investment research firm Hindenburg Research – which released a scathing report suggesting that the automaker had grossly overstated demand to investors and was nowhere near its claimed manufacturing capabilities. Production delays persisted and it wasn’t long until the businesses’ share price began to tumble. This matter was made worse by the public becoming suspicious of reverse mergers, SPACs, promises of technological innovations that never seem to manifest, and a souring economy.

By June 2021, Lordstown Motors publicly confessed that it did not have enough money to begin commercial production of its vehicle and was now in danger of bankruptcy. Following a couple of months of management shakeups, the company announced that it had sold the factory to Foxconn Technology Group for $230 million. Many wondered how it planned on building cars without a factory, however, it was explained that Foxconn would invest $50 million into the company through a purchase of common stock and become the contract manufacturer for the Endurance pickup. Meanwhile, subsequent models would be built under the MIH EV Design LLC joint venture.

Foxconn’s new investment comes by way of purchasing existing Lordstown stock and totals $170 million USD. All of the money is said to be dedicated toward ensuring the Endurance pickup enters production and gives Foxconn an 18 percent stake in the company.

“Since announcing our first transaction with Foxconn more than a year ago, it has been our objective to develop a broad strategic partnership that leverages the capabilities of both companies,” stated Lordstown CEO Daniel Ninivaggi. “Foxconn’s latest investment is another step in that direction. Our Board of Directors and management team strongly believe that deep collaboration with the Foxconn EV ecosystem, including the Mobility-in-Harmony (MIH) open-source platform, offers tremendous opportunities to meet our mutual ambition to accelerate EV adoption globally. I look forward to welcoming Foxconn representatives to our Board and exploring other ways to deepen our partnership.”

[Image: Lordstown Motors]

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2 of 6 comments
  • Dusterdude Dusterdude on Nov 08, 2022

    Unfortunately not bullish based on Foxconn’s track record … Also , Lordstown doesn’t have scale vs competitors or the best technology

  • Zipper69 Zipper69 on Nov 09, 2022

    Not much more than vaporware...

  • Jwee More range and faster charging cannot be good news for the heavily indebted and distracted Musk.Tesla China is discounting their cars. Apart from the Model 3, no one is much buying Tesla's here in Europe. Other groups have already passed Tesla in Europe, where it was once dominant.Among manufacturers, 2021 EV sales:VW Group 25%, Stellantis at 14.5%,Tesla at 13.9%Hyundai-Kia at 11.2% Renault Group at 10.3%. Just 2 years ago, Tesla had a commanding 31.1% share of the European EV marketOuch., changed their data, so this is slightly different than last time I posted this, but same idea.
  • Varezhka Given how long the Mitsubishi USA has been in red, that's a hard one. I mean, this company has been losing money in all regions *except* SE Asia and Oceania ever since they lost the commercial division to Daimler.I think the only reason we still have the brand is A) Mitsubishi conglomerate's pride won't allow it B) US still a source of large volume for the company, even if they lose money on each one and C) it cost too much money to pull out and no one wants to take responsibility. If I was the head of Mitsubishi's North American operation and retreat was not an option, I think my best bet would be to reduce overhead by replacing all the cars with rebadged Nissans built in Tennessee and Mexico.As much as I'd like to see the return of Triton, Pajero Sport (Montero Sport to you and me), and Delica I'm sure that's more nostalgia and grass is greener thing than anything else.
  • Varezhka If there's one (small) downside to the dealer not being allowed to sell above MSRP, it's that now we get a lot of people signing up for the car with zero intention of keeping the car they bought. We end up with a lot of "lightly used" examples on sale for a huge mark-up, including those self-purchased by the dealerships themselves. I'm sure this is what we'll end up seeing with GR Corolla in Japan as well.This is also why the Land Cruiser has a 4 year waitlist in Japan (36K USD starting MSRP -> buy and immediately flip for 10, 20K more -> profit) I'm not sure if there's a good solution for this apart from setting the MSRP higher to match what the market allows, though this lottery system is probably as close as we can get.
  • Jeff S @Lou_BC--Unrelated to this article but of interest I found this on You Tube which explains why certain vehicles are not available in the US because of how the CAFE measures fuel standards. I remember you commenting on this a few years ago on another article on TTAC. The 2023 Chevrolet Montana is an adorable small truck that's never coming to the USA. It's not because of the 1.2L engine, or that Americans aren't interested in small trucks, it's that fuel economy legislation effectively prevents small trucks from happening. What about the Maverick? It's not as small as you think. CAFE, or Corporate Average Fuel Economy is the real reason trucks in America are all at least a specific dimension. Here's how it works and why it means no tiny trucks for us.
  • Gabe A new retro-styled Montero as their halo vehicle to compete against the Bronco, Wrangler and 4Runner. Boxy, round headlights like the 1st generation, two door and four door models, body on frame.A compact, urban truck, Mighty Max, to compete against the Maverick. Retro-styled like the early 90s Mighty Max.A new Outlander Sport as more of a wagon/crossover to compete against the Crosstrek and Kona. Needs to have more power (190+ HP) and a legit transmission, no CVT.A new Eclipse hybrid to compete against the upcoming redesigned Prius. Just match the Prius's specs and make it look great.Drop the Eclipse Cross, I am not sure why they wanted to resurrect the Pontiac Aztec. Keep the Mirage and keep it cheap, make the styling better and up the wheel size. The Outlander seems fine.I like the idea of some sort of commercial vehicle, something similar in size to the Promaster City but with AWD.