Americans refer to the region between Pittsburgh and Cleveland as “Steel Valley”, the “Valley of Steel”. Blast furnaces, rolling mills and crucibles used to be smoking everywhere, but now a new industry is settling there: Foxconn, the Apple supplier from Taiwan, wants to build electric cars under the roof of an almost 600,000 square meter factory.
Foxconn recently bought the plant from Lordstown for $230 million. The Taiwanese are thus opening a new chapter in their company history: They now own their first vehicle factory in the world and at the same time have a significant presence in the USA.
Of course, building a car is more complicated than building an iPhone. But analysts take Foxconn seriously. After two decades of working with Apple, many say the company just understands how to manufacture – and could potentially compete with companies like Tesla and Rivian.
Nevertheless, doubts remain. Because the Valley of Steel is not supposed to be the place to be for the Apple Car that many fans have been waiting for for years. Foxconn dares its big auto experiment alongside two companies with a dubious reputation: Lordstown and Fisker. One does not know whether she will survive the coming months. The founder of the others had to give up before in the past. And neither company has ever delivered a car to a customer.
Foxconn is to build the Endurance, an electric pickup truck costing around $50,000, for Lordstown. When Lordstown announced the model three years ago, the hype was huge. Many spoke of America’s next electric hope. Lordstown was immediately considered a Tesla rival. The American Post even toyed with the idea of ordering tens of thousands of vehicles from the start-up.
But the dreams burst. Lordstown has only built a few prototypes so far, one of which caught fire on the road after ten minutes of a test drive. In addition, the managers inflated the number of pre-orders. At the beginning they spoke of 27,000, later even of 100,000. Last June, they revised that number down: to zero. There is a lot of interest, it said, but no binding pre-orders.
A year ago, Lordstown even warned of bankruptcy. It is possible, the company wrote to the US Securities and Exchange Commission at the time, that the money would run out in the next twelve months. The $230 million that Foxconn is now paying for the car factory will increase Lordstown’s chances of survival. But the bankruptcy warning, the company’s chief financial officer said this week, still applies.
It’s not that bad at Fisker. Founder Henrik Fisker is a legendary car designer, credited with some of the world’s most iconic cars, including the BMW Z8 and Aston Martin DB9. But his company has not yet mass-produced any of the announced models – the Ocean, the Ronin or the PEAR. And his former company Fisker Automotive, which once produced the Karma, Henrik Fisker had to sell in February 2014.
In the Valley of Steel, Foxconn is now expected to start building the PEAR in two years. It’s said to cost around $30,000, making it a model for the masses. According to Fisker, the abbreviation stands for “Personal Electric Automotive Revolution”. In German, the name of the model means: “Pear”.