Supply Chain Matters provides new information relative to a previous commentary related to Foxconn’s prior announced manufacturing operations and manufacturing engineering partnership with Lordstown Motors.


In 2021, with the assistance of the former Trump Administration, Taiwan based contract manufacturing services provider Foxconn and Lordstown Motors executed a deal to facilitate the sale of a previous General Motors 6.2 million square foot auto production facility in Lordstown, Ohio to Foxconn, for the sum of $230 million. Foxconn further indicated a desire to make an added equity investment in the start-up, with the CMS provider actually managing manufacturing operations of the Lordstown Endurance EV powered pick-up truck being designed.

In November of 2022, Supply Chain Matters highlighted for readers Foxconn’s actual announced equity relationship with the EV start-up, indicating that this CMS provider would invest $170 million to purchase common stock and newly created Lordstown Motors public and preferred shares, and that both companies would collaborate in developing their first electric vehicle together. This equity funding was to be partially utilized to support production of the first 500 vehicles.

The caveat to the investment was securing approval from the U.S. Federal Government’s Committee on Foreign Investment.

Our perspective at the time was that Foxconn was making a bold strategic play in electric vehicle platform design and high-volume production globally. The question is whether these efforts become entangled with growing geo-political trade and country specific intellectual property protections.

Latest Development

This week, both Bloomberg and The Wall Street Journal are reporting that Foxconn has notified Lordstown Motors that their prior agreement was breached because the stock price of Lordstown had fallen below $1 per share for upwards of 30 days, failing to comply with Nasdaq listing rules.

Lordstown, in turn, warned in a regulatory finding that if the start-up is not able to resolve this Foxconn dispute, the company may need to curtail operations or seek bankruptcy protections. This start-up is reportedly also seeking additional external funding.

According to specific reporting by The Wall Street Journal (Paid subscription or metered view), Lordstown indicated on April 25 had received the clearance from Cfuis, regarding the Foxconn participation, and up to that point, had purchased upwards of $22.7 million of Class A common, and $30 million of preferred shares. The two companies reportedly have until May 8 to close on the sale of an additional $47.3 million of shares based on the prior agreement.

Foxconn issued a statement to The Wall Street Journal indicating that the services provider remained open to continuing discussions that benefits respective stakeholders.

It would appear, based on these reports that these developments remain rather dynamic and uncertain.

Parallel Development

Bloomberg reports this week (Paid subscription required), that rival electric pick-up Rivian Automotive’s declining share price is revealing an ugly truth, the ability of these particular start-ups to compete in an increasingly crowded EV market where supply chain and production scale matter in timely start-up and volume production needs.

The premium end of the EV market has further changed with higher interest rates making auto loans and added equity investments far more expensive, and with newly announced U.S. EV buyer incentives now being capped to not include premium models. Rivian’s market capitalization, which reportedly exceeded $150 billion at the time of its IPO now stands at less than $12 billion.

As noted in our recent Supply Chain Matters highlights of Tesla’s latest quarterly financial performance, Elon Musk has embarked on a strategy for lowering prices and cranking-up production volumes to lock-out these new start-ups.

Indeed, the EV start-up environment is becoming rather challenging.


Bob Ferrari

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