Taiwan-based electronics manufacturer Foxconn is moving ahead with a plan to acquire a Lordstown Motors vehicle assembly plant in Ohio for $230 million, the companies announced on Wednesday.
The cash-strapped electric vehicle start-up will find some relief from the capital infusion, while the partnership gives Foxconn a jump start on producing fully electric trucks. Shares of Lordstown rose more than 13% after hours on the news.
According to a statement from the companies, Foxconn acquired $50 million of common stock directly from Lordstown Motors at a price of about $6.90 per share after signing the agreement in September.
Going forward, Foxconn will make a down payment of $100 million by November 18, subsequent payments of $50 million each in February and April, and a final closing payment before the end of April.
Once the deal is finally closed, Foxconn will get 1.7 million warrants to buy more Lordstown shares at a price of $10.50 per share.
Foxconn has also agreed to pursue a contract manufacturing agreement to assemble Lordstown Motors’ first product, an all-electric pickup truck called the Endurance.
In 2017, Foxconn promised the state of Wisconsin it would make a $10 billion investment in a 20 million-square-foot LCD manufacturing facility there, and create 13,000 jobs in the state in exchange for $2.85 billion in subsidies. The state, under former Gov. Scott Walker and at the urging of the Trump administration, agreed.
Eventually, Foxconn said would not be able to fulfill those promises and pared back its plans in the state dramatically. It reduced its planned investment there to $672 million from $10 billion, and cut the number of new jobs to 1,454.
As part of that reduced plan, Foxconn struck a deal with Fisker to produce EVs in the coming years in Mount Pleasant, Wisconsin, the site of the scuppered LCD factory.