The electronics supplier plans to inject $170 million in fresh capital to the once troubled carmaker
Taiwan-based electronics company Foxconn Technology Group–more commonly known as one of Apple’s iPhone manufacturers–is increasing its stake in Lordstown Motors Corp (Nasdaq: RIDE), a once-struggling EV startup that has recently begun production of its first all-electric pickup truck.
The two firms said on Monday that Foxconn wants to invest $170 million to purchase common stock and newly formed preferred shares in Lordstown, making fresh funding available to the carmaker as it seeks to raise production of its launch model, the Endurance.
Furthermore, Foxconn and Lordstown announced a collaboration to produce their first electric vehicle, but declined to disclose further details.
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READ: Lordstown Motors Finalizes Accord with Foxconn – But Cash Sufficiency Issues Remain
The truck manufacturer stated that the proceeds from the stock sale will be used to hire engineers and fund operations, including the production of the first 500 pickup trucks.
The fresh $170 million investment is still subject to clearance by the Committee on Foreign Investment in the United States and will be made in installments, according to Lordstown executive chairman Daniel Ninivaggi.
Post-transaction, Foxconn is expected to hold all of the truckmaker’s outstanding preferred stock and 18.3% of its common stock on a pro-forma basis, as well as the right to designate two members to the board of directors.
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Foxconn’s new investment in Lordstown is another another illustration of the company’s expanding ambitions in the automotive business. Back in October, the electronics supplier unveiled prototypes of two new electric vehicles in Taipei: the Model B crossover and the Model V pickup.
“After we announced our plans to build EVs in 2020, many people questioned whether Foxconn can build cars,” said chairman Young Liu. “Then when we unveiled three models a year later, everyone thought, ‘Wow, how did they manage to develop three models in just a year?’ That’s the speed we’re operating at.”
At the unveiling, Liu quipped that “Foxconn is not in the business of selling its own EV brand,” hoping that one day, the firm could make cars for Tesla.
Foxconn currently has a joint venture with Taiwanese carmaker Yulon, for which they’ve started mass production of an EV. It also announced plans earlier this year to develop a $9 billion facility in Saudi Arabia to produce a variety of products, including electric car components.
The firm also partnered with the European-American carmaker group Stellantis; together they will develop smark cockpit solutions for EVs. They also plan to develop auto chips under the partnership.
Information for this briefing was found via The Wall Street Journal and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
