Source, Automotive News, ET Auto
DETROIT: Electric vehicle start-up Lordstown Motors Corp will announce on Thursday the sale of the northeast Ohio assembly plant it acquired from General Motors Co to Taiwanese subcontractor Foxconn, said a person close to the case.
The deal will be announced by the companies on Thursday afternoon, said the source, who asked not to be identified. Bloomberg reported earlier that Lordstown was in talks to sell the plant to Foxconn and that a deal could be announced this week.
In August 2020, GM agreed to invest $ 75 million in Lordstown, which went public through a merger with DiamondPeak Holdings in a deal valuing the startup at $ 1.6 billion. GM’s investment included the plant and equipment, which were valued at $ 20 million.
Lordstown shares rose 8% by late morning.
Foxconn and Lordstown declined to comment when contacted by Reuters.
Lordstown, who appointed a new chief executive in August, is working on the launch of its Endurance electric van while seeking to raise additional funds. The Ohio-based company is also under regulatory review.
Lordstown had previously said it was in talks to build vehicles for other car makers or lease space at its factory. It only uses 30% of the plant’s 6.2 million square feet.
Foxconn, meanwhile, explored possible sites to build electric vehicles in the United States. The company previously said it was in talks with Wisconsin about building electric vehicles there. Foxconn and Fisker Inc said in May that they had finalized a deal for Foxconn to build electric vehicles for the electric vehicle startup.
Lordstown founder and largest shareholder Steve Burns resigned as chief executive in June following an internal investigation into allegations by short seller Hindenburg Research.
Lordstown is the subject of investigations by Manhattan Federal Prosecutors and the United States Securities and Exchange Commission regarding its merger with a Special Purpose Acquisition Company (SPAC) and the statements it has previously made about it. pre-orders of its vehicles.
GM announced the planned closure of the sprawling Lordstown plant in northeast Ohio in November 2018 along with three other US factories, prompting condemnation from then-US President Donald Trump and many American lawmakers.