Foxconn ignites Apple Car rumor with ex-GM factory purchase

General Motors made the Cruze at this plant. Image c/o Raymond Clarke Images/flickr

Apple Car speculation has gone up a couple more notches on news that key Apple supplier Foxconn will acquire a former General Motors vehicle factory in Ohio. This follows a deal in early September in which Apple itself acquired a vehicle testing centre formerly owned by Chrysler.

A story in car parts

This is of particular significance given claims earlier this year Foxconn would begin making Apple Car in the U.S., and a summer full or speculation that Apple is pulling together component suppliers for the vehicle.

But of course, we don’t know if this has anything to do with Apple, though itself and Foxconn are tight.

We don’t know what Foxconn’s long-term plans for the facility are, though it has said it intends to begin building electric vehicles in the U.S. and Thailand this year.

Foxconn has agreed to spend a total of $280 million on the deal (230m of which on the factory, $50m on stock in Lordstown Motors, which owns the factory). That cost alone suggests it needs the facility for what it is built for, given the average cost of land in Ohio is far lower than that. The plant offers 6.2 million square feet.

(It is worth noting Lordstown currently only uses c.30% of that space).

Lordstown Motors purchased the factory from GM for just $20 million two years ago. GM opened the plant in 1996.

We do at least know one vehicle Foxconn intends to make at the facility. It has agreed that it will make the ‘Endurance’ pickup for Lordstown there — but that still leaves plenty of capacity, I think.

We have announced an agreement in principle with Hon Hai Technology Group (Foxconn), along with an update on production and financials here at Lordstown Motors.

Read the full press releases here: https://t.co/ZmQdd5wPJd#RideWithLordstown pic.twitter.com/QxT5fVL3yW

— Lordstown Motors (@LordstownMotors) October 1, 2021

Lordstown had previously said it was in talks to build vehicles for other automakers or lease space in its factory, but has since hit numerous regulatory hurdles which may hurt the firm.

What Lordstown Motors said

Daniel Ninivaggi, Chief Executive Officer of Lordstown Motors Corp., said:

“We are excited about the prospect of joining forces with a world-class smart manufacturer like Foxconn and believe the relationship would provide operational, technology and supply chain benefits to our company and accelerate overall scaled vehicle production and increase employment in the Lordstown facility.

“The partnership would allow Lordstown Motors to take advantage of Foxconn’s extensive manufacturing expertise and cost-efficient supply chain, while freeing up Lordstown Motors to focus on bringing the Endurance to market, developing service offerings for our fleet customers and designing and developing innovative new vehicle models.”

What Foxconn said

Young Liu, Chairman of Hon Hai Technology Group, commented:

“We have high expectations through this partnership that we will be able to successfully integrate our resources with Lordstown Motors. In addition to achieving the goal of moving ahead our timeline to establish electric vehicle production capacity in North America, it also reflects Foxconn’s flexibility in providing design and production services for different EV customers.

“This mutually beneficial relationship is an important milestone for Foxconn’s EV business and our transformation strategy. I believe that the innovative design of the Endurance pickup truck, with its unique hub motors, delivers an advantageous user experience and has manufacturing efficiencies. It will undoubtedly thrive under our partnership and business model.”

Looking forward to a great partnership with Hon Hai Technology Group (Foxconn).

Great for Ohio and great for our team. #RideWithLordstown pic.twitter.com/i5cXdOgFVp

— Dan Ninivaggi (@NinivaggiDan) September 30, 2021

In the background

Apple has been engaged in its own car hardware R&D since 2014 and is now seeking component suppliers for the final vehicle, recent reports claimed.

The company hit a wall reaching agreements to subcontract the vehicle with existing automakers, and is now requesting quotations for components it wants to use.

The analysts at Bernstein predict Apple may sell 1.5 million of its vehicles by 2030, while previous reports suggest Apple wants to make its vehicles in the U.S., as much as possible.

We don’t know what the facts are, or if Apple Car will ever become a reality, but it sure seems like the frequency of related rumor is hitting the fast lane.

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