Foxconn and Lordstown Motors to Apply for US Loan for Electric Vehicle Plant
WASHINGTON (Reuters) – Global tech company Foxconn and startup Lordstown Motors Corp said on Friday they plan to apply for a loan from the US Department of Energy as part of a program to help pay for retooling costs of a factory to build electric trucks.
Foxconn has agreed in principle to buy an assembly plant in Lordstown, northeast Ohio for $ 230 million and resume production of a new pickup truck, the companies said Thursday. In January, Lordstown said it was in advanced talks with the department for a retooling loan.
Under the agreement in principle, the Taiwanese tech giant, also known as Hon Hai Precision Industry Co, will manufacture Lordstown Motors’ full-size Endurance pickup truck at its Lordstown plant, and it will also support the automaker. in start-up Fisker Inc, a Foxconn Partner and customer.
Lordstown shares were down 12.5% at the start of trading on Friday.
Lordstown told Reuters in January 2020 that he was seeking a $ 200 million loan under the program and that he officially applied in May 2020. The Department of the Ministry’s Advanced Technology Vehicles Manufacturing (ATVM) program Energy, which previously provided loans to Tesla, Ford and Nissan to re-equip factories, has not made any new loans since 2011.
Lordstown and Foxconn said in a filing that they would “each request a proportional amount of the ATVM loan and be responsible for a proportionate amount of all expenses incurred to secure the ATVM loan.”
The companies hope to complete a purchase agreement by October 31 and complete the deal by April 30.
Foxconn, the world’s largest contract electronics maker best known for assembling Apple’s iPhone, will invest $ 50 million in Lordstown’s capital. Lordstown Motors plans to enter into a long-term lease for part of the existing facility for its Ohio-based employees, and Foxconn plans to provide employment for many Lordstown employees.
Lordstown, which has struggled to start production of its Endurance pickup, had previously said it was in talks to build vehicles for other automakers or lease space at its factory. It currently only uses 20% of the plant’s 6.2 million square feet.
(Reporting by David Shepardson; Editing by Steve Orlofsky)