(Filing, background, adds more than stock price)
WASHINGTON, Oct 1 (Businesshala) – Global technology firm Foxconn and startup Lordstown Motors Corp. said on Friday they are partnering with American Energy from a program to help pay the cost of remodeling a factory to make electric trucks. Planning to extend the loan of the department.
Foxconn has agreed in principle to buy the Lordstown assembly plant in northeast Ohio for $230 million and take over production of a new pickup truck, the companies said Thursday. In January, Lordstown said it was in advanced talks with the department to get the loan back.
Under the in-principle agreement, the Taiwanese tech giant, also known as Hon Hai Precision Industry Company, will manufacture Lordstown Motors’ Endurance full-size pickup truck at its Lordstown facility, and the start-up will be automaker Fisker Inc. will also support Foxconn Partners and Customers.
Lordstown’s shares were down 12.5 per cent in early trade on Friday.
Lordstown told Businesshala in January 2020 that it was receiving a $200 million loan from the program and it was formally implemented in May 2020. The Energy Department’s Advanced Technology Vehicle Manufacturing (ATVM) program, which previously provided loans to Tesla, Ford and Nissan to remodel factories, has not created any new loans since 2011.
Lordstown and Foxconn said in a filing that they would each seek “a proportionate amount of the ATVM loan and be responsible for a proportionate amount of any and all expenses incurred in obtaining the ATVM loan.”
The companies are expected to conclude a purchase agreement by October 31 and the deal by April 30.
Foxconn, the world’s largest contract electronics maker, known for assembling Apple’s iPhone, will invest $50 million in Lordstown equity. Lordstown Motors plans to enter into a long-term lease for a portion of the existing facility for its Ohio-based employees, and Foxconn plans to employ several Lordstown employees.
Lordstown, which has struggled to start production of its Endurance pickup, previously said it was in talks to build vehicles for other automakers or lease space at its factory. It currently uses only 20% of the plant’s 6.2 million square feet. (Reporting by David Shepardson; Editing by Steve Orlofsky)