U.S. electric truck brand Lordstown Motors announced in May that it had officially acquired its factory by Hon Hai Group . Not only did its approximately 400 employees be transferred to Hon Hai , Lordstown CEO Edward Hightower also announced that in addition to continuing to test its first electric cargo card Endurance, the new car is also expected to be officially offline and put into production in the third quarter of 2022, and is expected to be delivered to consumers in the fourth quarter. In addition, Lordstown is expected to announce further new car plans with Hon Hai in the fourth quarter.
Lordstown and Hon Hai signed an asset purchase agreement (APA) on November 11, 2021, and Hon Hai obtained its existing production and assembly plant in Lordstown, Ohio.
On May 12, 2022, Lordstown and Hon Hai further signed an OEM manufacturing agreement and a joint venture development agreement. After completing the asset transfer, Hon Hai officially obtained the Lordstown factory on behalf of Hon Hai. The Ohio factory became Hon Hai's first electric vehicle manufacturing base in North America, and a total of about 400 Lordstown employees were transferred to Hon Hai. Hon Hai said that in the future, it will also provide North American employees in the electric vehicle field through cooperation with different OEM car manufacturers, and serve more electric vehicle customers through this base.
In addition, in the OEM manufacturing agreement, Lordstown Motors was also determined to become Hon Hai's first mass-produced commercial vehicle customer. It is expected that its Endurance electric truck model will begin to be produced at its Ohio factory in the second half of 2022, and Hon Hai will also supply some components.
Lordstown announced its second quarter financial report, previewing that Endurance will be offline in the third quarter of production
Now, Lordstown also announced related future product trends when it announced its second quarter of 2022 financial report in August. In the financial report, as of the end of the second quarter of 2022, Lordstown held cash flow of US$236 million, which mainly comes from the Cash proceedings of Hon Hai's factory acquisition and other cooperation cases, while the Total Proceed of Hon Hai will be as high as US$257 million.
Lordstown has a total of approximately US$61.3 million in profit in the second quarter of 2022. As much as US$120 million is from the funds acquired by Hon Hai Group, but the R&D R&D department spent about US$28.9 million to develop new cars such as Endurance, while the sales and administration departments also had an additional US$29.9 million in expenditure. Therefore, after the funds acquired by Hon Hai of Hon Hai for $120 million less the above expenses, the profit remaining for this quarter is about US$61.3 million.
In addition to as many as 400 employees transferred to Hon Hai, Lordstown CEO Edward Hightower also revealed that the Endurance, the electric truck model under the Lordstown brand, is still in full swing in the final stage of testing, verification, and regulatory certification process. It is expected that Endurance will still be offline in the third quarter of 2022, and will be delivered to consumers in the fourth quarter at the original pace. However, Edward Hightower also said that the existing funds are limited and only conservatively estimated that 500 vehicles can be produced by 2023.
Edward Hightower pointed out that with the use of the MIH alliance and supply chain resources established by Hon Hai, the electric cargo card Endurance is expected to be put into production smoothly, and hopes that Hon Hai’s electric vehicle supply chain will also help Lordstown Motors continue to launch more pure electric new car products in the future. In addition, Lordstown's executive chairman Daniel Ninivaggi said that in the past year, Lordstown has recruited and organized quite experienced management teams, and other measures to reduce capital-intensiveness such as selling factories, which are conducive to Lordstown's future brand and product lines.
Automobile Good Industry Agenda
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