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After the release of three concept cars, Foxconn has made a new move. On Nov. 11, Foxconn announced that it would buy electric car startup Lordstown Motors's car assembly plant in Ohio for $230 million.

It is understood that the car factory was owned by General Motors in the United States earlier. During its 50-year history, the factory has produced a series of classic models such as the Chevrolet Caprice, Vega, Covalds and so on. Since 2011, the factory has produced only one model of the Cruz. However, as the market environment changes, compact cars are becoming less and less popular in the US market, and the plant also has the problem of overcapacity. In March 2019, the last Cruz came off the line at the Lodstown plant, and in May it announced the sale of the Loddstown plant to local newcomer Lodstown Motors, with a loan of $40 million to complete the plant acquisition.

In line with the Chinese market, a number of new car-building brands emerged in the United States at that time, including Lordstown Motors, which was founded in 2018 by Steve Burns, former chief executive of American freight truck manufacturer Workhorse (CEO), and acquired GM's Loddtown plant in May 2019. In October of the same year, Loddtown Motor also merged with a shell company called DiamondPeak Holdings to list on Nasdaq in the form of a special acquisition company (SPAC). At one point, the new power was valued at $1.6 billion in its initial public offering.

In 2020, the COVID-19 epidemic spread around the world, especially in the United States, and the development of Loddtown Motor began to be in the doldrums. In November 2020, Loddtown Motors suddenly announced that it would postpone the delivery of the new car to September 2021, arousing suspicion among users and investors about the future of the company and the new car. In June, Loddtown Motor admitted in a report to the SEC that it did not have enough money to produce new cars and that it was at risk of bankruptcy. Subsequently, CEO Burns and Chief Financial Officer (CFO) Giulio Rodriguez also announced their resignation. This time, Foxconn acquired the Lordstown Motors car plant precisely because it is in a cash-strapped stage and sold to ease the financial pressure. It is understood that the sale between the two sides will be completed by the end of April 2022. It is worth mentioning that after the acquisition of the factory, Foxconn will contract its electric pickup truck Endurance for Lordstown Motors. Based on the MIH open platform, the two sides will design and develop commercial electric vehicles aimed at the global market, and both parties will have the right to sell new commercial electric vehicles in North America and the international market.

It is not difficult to see that with the rapid growth of new energy vehicles, Foxconn is not only willing to play a supporting role, but also frequently seeks the development of electric vehicles. As early as 2005, Foxconn began to slowly enter the car-building field. Earlier, Foxconn bought a 100% stake in Taiwan's Antai Electric for 370 million yuan, and began the technology and manufacturing research and development of automotive lithium battery power system. In 2013, Foxconn became a supplier to BMW, Tesla, Mercedes-Benz and other car companies. In 2016, Foxconn invested in Didi and officially entered the ride-hailing industry. In 2017, Foxconn invested in the Ningde era. At the end of 2020, Foxconn revealed that it would enter electric cars. Foxconn founder Terry Gou said: "Apple cars are just four-wheeled iPhone. If we can build iPhone, why can't we build electric cars?"

In order to better enter the automobile market, Foxconn announced in January this year that it signed a strategic cooperation framework agreement with Baiteng Motor and Nanjing Economic and technological Development Zone. The three parties will work together to promote mass production of Baiteng new energy products and strive to achieve mass production of M-Byte by the first quarter of 2022. However, the cooperation project between Foxconn and Baiteng was shelved because of the deteriorating financial situation of Baiteng. In addition, at the beginning of this year, Foxconn signed a strategic cooperation agreement with Geely to establish a joint venture aimed at providing contract manufacturing and customized consulting services for global automobile and travel companies. including, but not limited to, automotive vehicles or parts, intelligent control systems, automotive ecosystems and the whole process of the whole industry chain of electric vehicles.

On October 18, Foxconn parent company Hon Hai Precision Industry Co., Ltd. held a Science and Technology Day in Taiwan, where Hon Hai unveiled three electric cars. The three electric vehicles are Model T, SUV Model C and Model E, respectively.

According to relevant data, Foxconn was founded in 1988 and became Apple's largest contract manufacturer in 2007. Apple currently accounts for about 50% of Foxconn's annual sales. However, with the entry of other electronics companies, Foxconn's position as the "boss" of Apple contract factory is also threatened, which forces Foxconn to diversify.

Second, Foxconn's net profit has been shrinking since 2017. Foxconn's sales grew by only 0.3% in 2020, and it's not hard to see that the profits of its smartphone-making business are shrinking. In this context, Foxconn can only seek the development of electric vehicles to reduce its dependence on Apple.

According to data released by the China Automobile Association, the production and sales of new energy vehicles in October were 397000 and 383000 respectively, up 12.5 per cent and 7.2 per cent from the previous month. From January to October, the production and sales of new energy vehicles reached 2.566 million and 2.542 million respectively, an increase of 1.8 times over the same period last year. Some industry insiders said that the acquisition of the Ohio plant is a good thing, which can provide Foxconn with assembly capacity, equipment and talent. According to Foxconn's plan, the company will begin mass production of electric vehicles in markets such as the United States and Thailand in 2023. However, as the world's largest market for new energy vehicles, Foxconn has not put forward any clear plans for the time being.

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