Taiwanese electronics manufacturer Foxconn has begun production of Lordstown Motors’s electric pickup truck.
The news, which Bloomberg grabbed first, is a milestone for both companies: Foxconn as it diversifies from manufacturing consumer electronics like iPhones to electric vehicles, and Lordstown as it finally gets its much-anticipated Endurance truck off production lines and, hopefully, into customers’ hands.
Ever since going public via a special purpose acquisition (SPAC) merger in 2020 — a move that, in hindsight, is spelling doom for most EV SPACs — Lordstown has struggled to get to production. Last summer, the company issued a growing concern warning that it might not have enough funds to bring its EV to market, but was bailed out by an investment firm that agreed to purchase $400 million worth of shares over a three-year period.
The company further shed some weight by selling off its Lordstown, Ohio factory, which it had previously purchased from General Motors, to Foxconn for $230 million. Foxconn agreed to make Lordstown’s EVs for it, but the company will also use the Ohio factory to produce EVs for Fisker, another EV SPAC.
The production volume of the Endurance pickup will ramp slowly, with a slight crescendo in November and December, because of those pesky supply chain constraints, according to a statement from Lordstown. Very slowly, it seems. So far, two commercial release production vehicles have rolled off Foxconn’s production line, with the third “expected to be completed shortly.” Three almost down, 47 to go — Lordstown intends to deliver about 50 units to customers beginning in the fourth quarter, and the rest of the first batch of 500 units in the first half of 2023, if it can raise more money.
That caveat is key, and is possibly one of the reasons why, despite this milestone, Lordstown’s shares are down 7.18% at 12:00 p.m. ET. Turns out building electric vehicles from the ground up is incredibly difficult and expensive, a hard truth that fellow EV SPACs Nikola and Lucid Motors are also coming to grips with as they, too, try to raise additional capital.
Lordstown said it will end the quarter and the year with about $195 million and $110 million in cash and cash equivalents, respectively. But that’s likely not enough to scale production. To make it past 50 pickups, the company is looking to its old pal Foxconn, as well as other strategic partners, to get the cash it needs to keep this business going. As part of Foxconn’s purchase of the Ohio factory, the two companies entered into a joint venture to co-develop EV programs, and it’s this spring that Lordstown will attempt to tap. Foxconn, which owns 55% of the JV, already loaned Lordstown $45 million to support the EV-maker’s own capital commitment to the JV.
It’s worth noting that Foxconn’s reputation for delivering isn’t exactly pristine, either. The company has struggled to get a planned $10 billion LCD factory in Wisconsin off the ground — a project that former U.S. President Donald Trump once called “the eighth wonder of the world.” Earlier this month, Foxconn reduced its planned investment in the factory to a measly $672 million and cut the number of new jobs to 1,454 from 13,000.