eventually. Lordstown Motors, Foxconn commence Endurance EV production

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Taiwanese electronics maker Foxconn has started production of Lordstown Motors’ electric pickup truck.

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The news, which Bloomberg first caught, is a milestone for both companies: Foxconn as it diversifies from manufacturing electric vehicles like the iPhone to electric vehicles and Lordstown as it finally takes its much-anticipated Endurance truck off production lines. And, hopefully, the customers’ hands.

Since going public in 2020 via a Special Purpose Acquisition (SPAC) merger – a move that, however, has spelled doom for most EV SPACs – Lordstown has struggled to get production. Last summer, the company issued a warning of growing concern that it might not have enough funds to bring its EVs to market, but was bailed out by an investment firm that would be worth $400 million over a three-year period. agreed to buy the shares.

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The company lost some of the weight by selling its Lordstown, Ohio factory, which it had previously purchased from General Motors to Foxconn for $230 million. Foxconn agreed to make EVs from Lordstown for it, but the company would also use the Ohio factory to produce EVs for Fisker, another EV SPAC.

Due to these pesky supply chain constraints, the Endurance pickup’s production volume will gradually increase, with a slight crescendo in November and December, according to a statement from Lordstown. Very slowly, it seems. So far, two commercial-release production vehicles have rolled off Foxconn’s production line, with the third “expected to be completed soon.” Three almost down, 47 to go – Lordstown intends to deliver around 50 units to customers starting in the fourth quarter, and the rest of the first batch of 500 units in the first half of 2023, if it can raise more money.

This warning is important, and probably one of the reasons why, despite this milestone, Lordstown shares are down 7.18% at 12:00 a.m. ET. Building electric vehicles from the ground up is incredibly difficult and expensive, a hard truth that fellow EV SPACs Nikola and Lucid Motors are catching on as they try to raise additional capital, too.

Lordstown said it would end the quarter and year with $195 million and $110 million in cash and cash equivalents, respectively. But this is probably not enough to increase production. To take this beyond 50 pickups, the company is looking for long-time friend Foxconn as well as other strategic partners to get the cash needed to continue this business. As part of the purchase of the Ohio factory by Foxconn, the two companies entered into a joint venture to co-develop EV programs, and it is this spring that Lordstown will attempt to tap. Foxconn, which owns 55% of the joint venture, has already extended a $45 million loan to Lordstown to support the EV-maker’s capital commitment to the joint venture.

It’s worth noting that Foxconn’s reputation for delivering isn’t out of date at all. The company has struggled to get a planned $10 billion LCD factory off the ground in Wisconsin – a project that former US President Donald Trump once called the “eighth wonder of the world”. Earlier this month, Foxconn slashed its planned investment in the factory to $672 million and cut the number of new jobs from 13,000 to 1,454.

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