With an investment of up to $170 million, Foxconn will have the most shares in Lordstown Motors.
(Corrects paragraph 2 to say that Foxconn will own 18.3% of Lordstown when it’s done, not 19.3%.)
Lordstown Motors Corp. and a Foxconn affiliate have made a deal for the affiliate to invest up to $170 million in the electric vehicle (EV) maker. This will make Foxconn the biggest shareholder in Lordstown Motors Corp., with a nearly 20% stake.
Refinitiv says that Foxconn Ventures Pte Ltd will buy 12.9 million shares on or after November 22 and another 26 million shares. This will give Foxconn 18.3% of Lordstown’s common stock and all of its preferred stock, which is more than founder Stephen Burn’s 17.2% stake.
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Lordstown will use the money from selling shares to fund the development and design of a new electric vehicle programme with Foxconn. It will do this instead of the joint venture deal it had with Foxconn before, which it said in a filing and which caused shares to rise 7% to $2.06 in Monday’s extended trading.
Foxconn said that the deal would strengthen ties between Lordstown and its Mobility in Harmony (MIH) EV development platform.
Foxconn said, “In the future, there will also be chances to share LMC’s technical resources with other customers, which will help grow the MIH EV ecosystem and give customers more options for better solutions so they can be more competitive.”
Separately, the company’s net loss for the quarter that ended on September 30 was $154.4 million, which was more than the $95.8 million loss from the same time last year.
Demand for electric cars has gone up all over the world, but supply chain problems and rising material costs have made it hard for companies to increase production and keep up with the high demand.
After buying Lordstown’s Ohio factory in September, Foxconn started making Lordstown’s Endurance pickup trucks. The deal was made because they needed to get the money they needed to start making Endurance.
Lordstown plans to stop making the Endurance by 2023 or later, depending on how long it takes to find a way to cut the cost of its materials.
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Lordstown said on Monday that the cost of materials to make its Endurance electric pickup truck was higher than the price it planned to sell it for. It also said that it would not have positive gross margins until the cost of its bill of materials went down.
