Foxconn Technology Group (Foxconn), a Taiwan-based company and the world’s largest electronics manufacturer, is nearing a deal to buy the electric truck startup Lordstown Motors’ Ohio plant, according to a report from Bloomberg, citing people familiar with the matter. The total value of the transaction was not disclosed.
The people, who asked not to be named as the plan isn’t yet public, told Bloomberg that the deal could be announced as early as next Thursday. The company has been running low on cash for about a year now. Its shares jumped as much as 8% to $7.98 after the news. A Lordstown Motors spokesperson declined to comment and Foxconn representatives didn’t immediately respond to requests either.
The Ohio, Illinois-based electric SPAC company has lost 75% of its market value in the last three quarters. We wrote about the company in May after it came under the Securities and Exchange Commission (SEC) investigation for an alleged 100,000 in fake preorders and zero car delivery.
Lordstown Motors was founded in 2019 by Steve Burns to offer Americans a glimpse into the future of all-electric truck vehicles. The company currently has no revenue and zero delivery.
Prior to that, Steve Burns previously served as the CEO WorkHorce, another electric car company. Burns once said that the goal of the company is “to become the first electric truck to finish the race and to prove the capability of its unique design, which features four in-wheel hub motors that are the drivetrain’s only moving parts.” Lordstown Motors even caught the attention of former President Trump.
Then on March 12, 2021, Hindenburg issued a damning report targeting Lordstown. Hindenburg pointed to series of claims made by Lordstown CEO Steve Burns where he talked about the company booking of 100,000 pre-orders as proof of deep demand for the company proposed EV truck. For example, according to Hindenburg, “Lordstown recently announced a 14,000-truck deal from E Squared Energy, supposedly representing $735 million in sales. E Squared is based out of a small residential apartment in Texas that doesn’t operate a vehicle fleet.”
In May, Lordstown Motors said that with its current cash and cash equivalents of $587 million as of the end of the first quarter, it did not have enough funding to launch the Endurance, an electric pickup truck geared toward commercial operators. “These conditions raise substantial doubt regarding our ability to continue as a going concern,” the company said in the filing.
A month later, Lordstown Motors announced that CEO Steve Burns and CFO Julio Rodriguez have resigned from the company. According to the announcement, Angela Strand has been appointed as executive chairwoman and will lead the company until a new CEO is appointed. The company said Becky Roof will serve as Interim CFO.
“We remain committed to delivering on our production and commercialization objectives, holding ourselves to the highest standards of operation and performance and creating value for shareholders,” Strand said in a statement.