Taiwan manufacturing giant Hon Hai Precision Industry Co. is working to establish its first electric vehicle (EV) plant through acquiring the assets of American automaker Lordstown Motors Corp. in Ohio, the company said in a statement Friday.
The two companies have signed a non-binding deal to negotiate a definitive agreement that will allow Hon Hai to purchase Lordstown Motor’s 6.2 million-square-foot factory in Ohio for US$230 million, including equipment, land and a number of staff members, the statement said.
The potential transaction, however, will not include Lordstown Motors’ hub motor assembly line, battery module and packing line assets, certain intellectual property rights, and other excluded assets, the statement noted.
“We have high expectations through this partnership that we will be able to successfully integrate our resources with Lordstown Motors,” Young Liu (???), president of Hon Hai, which is globally known as Foxconn, said in the statement.
“This mutually beneficial relationship is an important milestone for Foxconn’s EV business and our transformation strategy,” he added.
Meanwhile, the two companies also signed a separate and binding subscription agreement, under which Hon Hai will purchase US$50 million of Lordstown Motors’ common stock directly from the American EV manufacturer at a price of US$6.8983 per share, the statement said.
Hon Hai declined to reveal the deadline for the acquisition negotiation, saying only discussions are ongoing.
The deal, if closed, would allow Hon Hai to build its first EV manufacturing plant in the U.S., working jointly on Lordstown Motors’ EV programs and supporting other partners, according to the statement.
Daniel Ninivaggi, chief executive officer of Lordstown Motors, said in a separate statement that the agreements “would provide operational, technology and supply chain benefits to our company and accelerate overall scaled vehicle production and increase employment in the Lordstown facility.”
Lordstown Motors would take advantage of Hon Hai’s extensive manufacturing expertise and cost-efficient supply chain while freeing itself up to focus on bringing its first all-electric pick-up truck to market and developing new vehicle models, he added.
Founded in Ohio in 2019, Lordstown Motors is a provider of electric light duty trucks and focuses on the commercial fleet market, according to its website.
Source: Focus Taiwan News Channel