Foxconn, the global technology firm most commonly known for assembling the iPhone, announced this Friday it would seek a loan from the Department of Energy to repurpose an electric truck plant it acquired from Lordstown Motors Corp.
Firstly, Foxconn acquired the factory from the start-up Lordstown Motors. Under the $230 million agreement, Foxconn would take over the production of a new pickup truck.
However, the plant needs further investment to assemble the new model successfully. In fact, Lordstown had already asked the Department of energy for a loan since January.
Moreover, the agreement also included that the tech giant, also known as Hon Hai Precision Industry Co., will manufacture Lordstown Motors’ Endurance full-size pickup truck at its Lordstown facility. But it would also support start-up automaker Fisker Inc, a Foxconn partner, and customer.
Upon the news, Lordstown shares were down 12.5% in early trading this Friday. In addition, according to Reuters, in January 2020 Lordstown pursued a $200 loan to the Department of Energy, and formally applied in May 2020. Nevertheless, the loan has not yet come to fruition.
Also recommended for you: European gas prices reach all-time highs; up 400% this year. Click here to read.
Foxconn to help Lordstown with employment
Furthermore, the program to which the companies applied was the Advanced Technology Vehicles Manufacturing (ATVM) program. It previously awarded loans to Tesla, Ford, and Nissan to retool factories; however, it has not made any new loans since 2011.
Consequently, this Friday, both Lordstown and Foxconn said they will each “seek a proportionate amount of the ATVM Loan and will be responsible for a proportionate amount of any and all expenses incurred in obtaining the ATVM Loan.”
On the other hand, in regards to the factory acquisition, the companies’ hope to complete the deal by October 31, and close it by April, 2022. Foxconn would invest up to $50 million for the acquisition.
In addition, 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 offer employment to many Lordstown employees.
Finally, the acquisition and retooling of the factory would give the opportunity to use the factory’s full potential. In fact, currently, the automaker uses only 20% of the Ohio’s plant. It has a total of 6,2 million square feet.