WASHINGTON / DETROIT, Sept. 30 (Reuters) – Global tech firm Foxconn will buy an assembly plant owned by U.S. electric vehicle start-up Lordstown Motors Corp (RIDE.O) for $ 230 million and resume production of ‘a new pickup, the companies said on Thursday.

Under the agreement in principle, the Taiwanese tech giant, also known as Hon Hai Precision Industry Co. (2317.TW), will manufacture Lordstown Motors’ full-size Endurance pickup truck at its Lordstown plant and support also Foxconn’s partner and customer, start-up automaker Fisker Inc.

Young Liu, chairman of Foxconn, said the deal would help Foxconn achieve “the goal of advancing our schedule to establish electric vehicle production capacity in North America.”

Foxconn, the world’s largest contract electronics maker best known for assembling Apple’s iPhone, will invest $ 50 million in Lordstown’s capital. Lordstown Motors plans to enter into a long-term lease for part of the existing facility for its Ohio-based employees, and Foxconn plans to provide employment for many Lordstown employees.

Lordstown CEO Daniel Ninivaggi said in an interview that the new partnership with Foxconn allows Lordstown to transition to a less capital-intensive business model and the deal is expected to close in about six months.

“We can get the benefits of the ladder without necessarily having to do everything ourselves,” Ninivaggi said.

Under the agreement, Lordstown Motors will issue warrants to Foxconn for 1.7 million common shares at an exercise price of $ 10.50 per share.

Lordstown said separately on Thursday that it would go ahead with its plan to build a limited number of vehicles for testing and regulatory approvals until early 2022.

In April, Foxconn significantly downsized a planned $ 10 billion factory in Wisconsin, a project former US President Donald Trump called the “eighth wonder of the world.”

Foxconn cut its planned investment to $ 672 million from $ 10 billion and cut the number of new jobs from 13,000 to 1,454. It had proposed a 20 million square foot manufacturing campus in Wisconsin that would have been the largest investment in US history for a new location by a foreign-based company.

Lordstown shares closed 8.4% higher and nearly 10% higher in after-hours trading.

Lordstown, which has struggled to start production of its Endurance pickup, had previously said it was in talks to build vehicles for other automakers or lease space at its factory. It currently only uses 20% of the plant’s 6.2 million square feet. Read more

Fisker finalized a vehicle assembly agreement with Foxconn in May. Fisker chief executive Henrik Fisker said in an interview on Thursday that Foxconn would build 150,000 vehicles a year to start for Fisker, with production scheduled to begin by 2024.

Foxconn, meanwhile, explored possible sites to build electric vehicles in the United States. The company previously said it was in talks with the state of Wisconsin to build electric vehicles there. Foxconn and Fisker Inc (FSR.N) said in May that they had finalized a deal for Foxconn to build electric vehicles for the electric vehicle startup. Read more

Reporting by Ben Klayman in Detroit, additional reporting by David Shepardson in Washington and Ben Blanchard in Taipei City; Editing by Steve Orlofsky, Bill Berkrot and Sam Holmes

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