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Taiwanese electronics manufacturer Foxconn has begun production of Lordstown Motors’ electric pickup truck.
The news, first picked up by Bloomberg, is a major milestone for both companies: Foxconn’s transition from consumer electronics like the iPhone to electric vehicles, and Lordstown finally rolling its long-awaited endurance car off the production line and hopefully to customers. ‘ Hands.
Since going public in 2020 through a special purpose acquisition (SPAC) merger — a move that would have been disastrous for most EV SPACs in hindsight — Lorstown has struggled to get into production. Last summer, the company raised concerns that it might not have enough cash to bring EVs to market, but was bailed out by an investment firm that agreed to buy $400 million in stock over three years.
The company shed some weight by selling the Lordstown, Ohio plant it previously bought from General Motors to Foxconn for $230 million. Foxconn agreed to make the Lordstown EVs for it, but the company could use the Ohio plant to make EVs for Fisker, another EV SPAC.
Endurance pickup production volumes will grow more slowly in November and December because of those pesky supply chain constraints, Lorstown said. Very slowly, it seems. So far, two commercial production vehicles have rolled off the Foxconn production line, with a third “expected to be completed soon”. Three down, 47 to go — Lordstown plans to deliver about 50 units to customers starting in the fourth quarter and the remaining 500 units in the first half of 2023 if it can raise more money.
That caveat is key, and perhaps part of the reason it’s a milestone, Lordstown shares were down 7.18% at 12:00 p.m. Building electric vehicles from the ground up is incredibly difficult and expensive, a harsh reality that fellow EV SPACs Nicola and Lucid Motors are grappling with as they try to raise more capital.
Lorstown said it will end the quarter and year with about $195 million and $110 million in cash and cash equivalents, respectively. But this may not be enough to increase production. To get past 50 pickups, the company is looking to old pal Foxconn as well as other strategic partners to get the money it needs to keep this business going. As part of the purchase of Foxconn’s Ohio factory, the two companies have launched a joint venture to develop EV programs together, and Lorstown will try to tap into it this spring. Foxconn, 55% of J.V. The owner, the EV maker to J.V.
It’s worth noting that Foxconn’s reputation for delivery isn’t exactly pristine either. The company has struggled to get a proposed $10 billion LCD factory off the ground in Wisconsin — a project former US President Donald Trump once called the “eighth wonder of the world.” Earlier this month, Foxconn cut its planned investment at the plant to $672 million and cut the number of new jobs from 13,000 to 1,454.
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