Foxconn Investment Enables Lordstown to Expand EV Manufacturing Program


Lordstown Motors Corp. (LMC), an original equipment manufacturer of electric vehicles (EV) focused on the commercial fleet market, and Foxconn Ventures Pte. Ltd., an affiliate of global technology company Hon Hai Technology Group, have reached an agreement pursuant to which Foxconn agreed to make additional equity investments in LMC.

The investments will be in the form of $70 million of LMC’s Class A common stock, $0.0001 par value per share, and up to $100 million of a newly created Series A Convertible Preferred Stock, $0.0001 par value per share. Upon completion of the investment transactions, Foxconn is expected to hold all of LMC’s outstanding preferred stock and 18.3% of its common stock on a pro-forma basis, and will have the right to designate two members of LMC’s Board of Directors.

Lordstown Motors will use the proceeds from the sale of the common stock for general corporate purposes and the proceeds from the sale of the preferred stock to fund development and design activities for a new EV program in collaboration with Foxconn. The $100 million direct preferred stock investment replaces the joint venture funding previously announced by Foxconn and LMC.

Pursuant to the agreements governing the investment transactions, at an initial closing expected to be held on or about November 22, 2022, subject to customary conditions, Foxconn will purchase an aggregate of approximately 12.9 million shares of common stock at a purchase price of $1.76 per share, resulting in total proceeds of $22.7 million, and 300,000 shares of preferred stock at a purchase price of $100 per share, resulting in total proceeds of $30 million. The remaining shares of preferred stock will be purchased by Foxconn based on achieving certain EV Program funding milestones to be agreed-upon by the parties.

Following receipt of applicable regulatory approvals, including a review by the Committee on Foreign Investment in the United States (CFIUS), and subject to other customary conditions, Foxconn will purchase an additional 26.9 million shares of common stock at a purchase price of $1.76 per share, resulting in total proceeds of approximately $47.3 million. Pursuant to the transaction agreements, Foxconn has also been granted the right to participate in future equity offerings by LMC to prevent dilution of its ownership interest.

“Since announcing our first transaction with Foxconn more than a year ago, it has been our objective to develop a broad strategic partnership that leverages the capabilities of both companies,” says Daniel Ninivaggi, executive chairman of LMC. “Foxconn’s latest investment is another step in that direction. Our board of directors and management team strongly believe that deep collaboration with the Foxconn EV ecosystem, including the Mobility-in-Harmony (MIH) open-source platform, offers tremendous opportunities to meet our mutual ambition to accelerate EV adoption globally. I look forward to welcoming Foxconn representatives to our board and exploring other ways to deepen our partnership.”

“Over the last year, the LMC and Foxconn teams have worked collaboratively to bring the endurance into commercial production, despite numerous external challenges,” comments Edward Hightower, CEO and president of LMC. “We acknowledge and appreciate the confidence in our team that is shown by this investment. The combination of LMC’s experienced vehicle development team, Foxconn’s growing EV ecosystem, the MIH platform, and our asset-light business model will allow us to bring great EVs to market faster and more efficiently.”

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