The tech giant is spending up to $170m (£147.8m) in shares in loss-making start-up Lordstown Motors.
The big cash injection comes as the company intends to ramp up production of its first model, the Endurance.
Lordstown recently began building the vehicle at a former General Motors plant in Ohio.
Under terms of the deal, the world’s largest custom electronics maker acquired more than 18% of Lordstown’s shares, becoming the company’s largest investor.
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“Since announcing our first transaction with Foxconn over a year ago, our focus has been on building a broad strategic partnership that leverages the capabilities of both companies,” said Daniel Ninivaggi, executive chairman of Lordstown. “Foxconn’s recent investment is another step in that direction,” he added.
The two companies also said they would jointly develop an electric vehicle, but did not elaborate on the plan.
The collaboration comes after the world’s largest electric car maker, Tesla, owned by multi-billionaire Elon Musk, was reported by Reuters earlier this month that it planned to begin mass production of its Cybertruck in late 2023.
It would be two years after the original target for the highly anticipated pickup truck that Mr Musk unveiled in 2019.
The investment from Taiwan’s Foxconn is the latest cash injection for Lordstown as the company continues to operate at a loss. Separately on Monday, numbers for the three months to the end of September showed a net loss of $ 154.4 million, before the $ 95.8 million loss the company recorded in the same period last year.
Lordstown stock was up nearly 18% in expanded New York trading following the announcements.
Last week, Foxconn reached an agreement with Saudi Arabia’s state fund to produce electric vehicles in the kingdom.
The joint venture will operate under the Ceer brand, which sounds like the Arabic word for “guide”.
Ceer will license the technology from German BMW and aims to sell its electric vehicles starting in 2025. The deal is part of Saudi Arabia’s drive to shift its economy away from dependence on fossil fuels.
Last month, Liu Young-way, president of Foxconn, said he hopes the company will someday produce cars for Tesla while increasing production of electric vehicles.
Speaking at the company’s annual Tech Day, he said the company aims to replicate its success in consumer equipment manufacturing as it expands into electric vehicle manufacturing for major brands in the auto industry.