Foxconn Remains ‘Open’ to Solution with Lordstown Motors
LORDSTOWN, Ohio – Foxconn Chairman Young Liu says the Taiwanese tech giant remains “open to continued dialogue” with Lordstown Motors Corp. regarding a stalled investment agreement with that company.
Liu, during a conference call with analysts and journalists discussing the company’s first quarter results early Thursday, also said that Foxconn’s issue with Lordstown Motors does not impact manufacturing operations at Foxconn’s Lordstown plant.
“We remain open to continued dialogue to find the best solution for each other,” Liu said, declining to provide more detail.
“We have seen this past month how tough the disruption is for the EV industry,” he said.
Lordstown Motors Corp. said in a regulatory filing last week that the company and Foxconn are at an “impasse” regarding future investments in the EV startup, and that Foxconn did not intend to close on a critical financing package on May 8.
That date has come and gone without an announcement of a closing.
Under the terms of a $170 million investment agreement signed in November, Foxconn was supposed to close on a subsequent round of stock purchases worth $47.3 million on May 8. In November, Foxconn closed on approximately $57 million in equity purchases. The investment was to be used for future EV products on Foxconn’s Mobility-In-Harmony, or MIH, platform.
Foxconn asserts that Lordstown Motors is in breach of that agreement, since Lordstown Motors’ stock price has fallen below $1 for more than 30 consecutive trading days, a violation of Nasdaq rules.
Lordstown Motors said last week that should it not find new investment, that it would consider bankruptcy as an option. Foxconn serves as a contract manufacturer for the Lordstown Motors Endurance, an all-electric pickup that is in limited production at Foxconn’s plant here.
Foxconn purchased Lordstown’s plant – a former General Motors facility – in November 2022 for $230 million. The Taiwanese manufacturer, best known for producing iPhones, plans to build multiple electric vehicles at the plant in partnership with other original equipment manufacturers.
“Our approach to the production capacity we have in Ohio is comprehensive,” Liu said. “We are being prudent about how to optimize that capacity with the best customers. In the last couple of years, Foxconn has been proactively seeking customers.”
The plant recently launched Monarch Tractor’s MK-V, an electric, driverless optional tractor, and is developing a prototype for the Indi One EV.
“However, now the interest is two-way. We’re also being approached by potential customers as well – I’m talking about traditional auto OEMs,” Liu said.
The Foxconn chairman said the Inflation Reduction Act, which provides tax credits for consumers who buy EVs manufactured in the United States, has helped to accelerate interest in the Ohio plant.
“The IRA has made Ohio capacity attractive,” he said, noting opening the plant to multiple users helps spread risk in the EV market.
Foxconn has set a target of reaching 5% of global market share in 2025, Liu said. Over the next two years, the company plans to engage in “active courtship” of new customers and acquire the skills and technologies needed to gradually ramp up to mass production.
“We’re mission-minded in our focus in Ohio,” Liu said.
Pictured at top: File photo of Foxconn’s Lordstown plant.
Copyright 2024 The Business Journal, Youngstown, Ohio.
