• Lordstown Motors, a developer of light-duty battery-electric pickup trucks for commercial fleets, has closed its USD 230 million deal to sell its manufacturing facility in Ohio to Taiwanese electronics manufacturer Foxconn. The deal has generated proceeds of roughly USD 260 million including reimbursement of certain operating and expansion costs.

• As per the deal, Foxconn would become a contract assembler for the company’s upcoming pickup truck of which commercial production and deliveries are set to begin in Q3 and Q4 2022, respectively.

• The two companies have also entered into a joint venture (JV) agreement to co-develop electric vehicles (EVs). The JV will be named MIH EV Design LLC and Foxconn and Lordstown will hold 55% and 45% stakes, respectively.

<ul><li> Analyst QuickTake: Amidst growing concern and cashflow issues in mid-2021, Lordstown announced plans to sell its only manufacturing facility in Ohio to Foxconn last November . Today, Lordstown’s ability to continue and achieve its production targets is contingent on the closing of the deal. However, even with the sale, Lordstown’s capital shortage is indicative of gaps in planning at the operational and strategic levels. In fact, earlier this week, the company revealed that it still requires an additional USD 150 million to commence production of the vehicles despite the sale.</ul>