Photo: Lordstown Motors
After Lordstown Motors Corporation (LMC) announced it would probably go bankrupt if its deal to sell its factory to Foxconn did not proceed, we got a happy ending. On May 11, the EV startup announced that the plant now belongs to the Taiwanese company and that it will make it possible to sell the Endurance before the year’s end.
If things go according to plan, Lordstown will sell an electric pickup truck before Tesla is able to present the production version of the Cybertruck. Apart from that, the deal created a new automaker (Foxconn) and saved another one (Lordstown), which also received more money than we had previously expected.
The plant was sold for $230 million, but Foxconn also paid Lordstown Motors around $27 million in operating and expansion costs. That brings the total to $257 million. On top of that, the Taiwanese company is also investing $100 million in the joint venture that will manufacture Lordstown Motors' electric pickup trucks at the factory.
Foxconn has 55% of this joint venture, which would make it put $55 million on the deal, but it lent Lordstown Motors the $45 million the EV startup needed for its part. You could consider that this would make the total be $302 million. However, the truth is that the $55 million Foxconn is investing in the deal also exempted Lordstown from disbursing this amount. That said, we prefer to consider the startup has received $357 million from the Taiwanese titan. The amount could be even higher after Foxconn paid $50 million in LMC Class A common stock, but that was before the plant purchase was closed.
The new joint venture is called MIH EV Design LLC. It has the same name as the MIH Open Platform Foxconn developed, and that is not by chance. The new company has the goal of developing new Lordstown commercial vehicles for the U.S. market “and other OEMs internationally.” That suggests that Lordstown Motors would be willing to license its cars for other companies to produce them under their brands in different markets. Foxconn already has one client for its manufacturing services with the new factory: Fisker, with the Project PEAR.
All things considered, it is clear that the Lordstown Endurance will be a unique product. It will be the only one entirely developed by the EV startup and possibly the only one with in-wheel motors. The MIH Open Platform is quite flexible, but it is not even remotely similar to what Lordstown initially conceived. As long as it does not bite the dust, that will be enough for its investors and employees.
The plant was sold for $230 million, but Foxconn also paid Lordstown Motors around $27 million in operating and expansion costs. That brings the total to $257 million. On top of that, the Taiwanese company is also investing $100 million in the joint venture that will manufacture Lordstown Motors' electric pickup trucks at the factory.
Foxconn has 55% of this joint venture, which would make it put $55 million on the deal, but it lent Lordstown Motors the $45 million the EV startup needed for its part. You could consider that this would make the total be $302 million. However, the truth is that the $55 million Foxconn is investing in the deal also exempted Lordstown from disbursing this amount. That said, we prefer to consider the startup has received $357 million from the Taiwanese titan. The amount could be even higher after Foxconn paid $50 million in LMC Class A common stock, but that was before the plant purchase was closed.
The new joint venture is called MIH EV Design LLC. It has the same name as the MIH Open Platform Foxconn developed, and that is not by chance. The new company has the goal of developing new Lordstown commercial vehicles for the U.S. market “and other OEMs internationally.” That suggests that Lordstown Motors would be willing to license its cars for other companies to produce them under their brands in different markets. Foxconn already has one client for its manufacturing services with the new factory: Fisker, with the Project PEAR.
All things considered, it is clear that the Lordstown Endurance will be a unique product. It will be the only one entirely developed by the EV startup and possibly the only one with in-wheel motors. The MIH Open Platform is quite flexible, but it is not even remotely similar to what Lordstown initially conceived. As long as it does not bite the dust, that will be enough for its investors and employees.
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