Foxconn says EV sales are so slow it's converting a factory to build AI servers instead

Taiwanese contract manufacturing giant Foxconn has sold its US electric vehicle factory and will use the land to make AI servers instead.

A Monday filing revealed the sale of the facility in Lordstown, Ohio, which Foxconn acquired from startup Lordstown Motors in 2022, and that the company will continue to operate on the site and pursue other activities.

According to Japanese outlet Nikkei, Foxconn sold the plant as it feels the North American electric vehicle market is soft as production capacity exceeds demand, and the company wants to improve its ability to manufacture AI servers in the USA. The Wall Street Journal also reported the shift to server production at the Ohio site.

News of the sale came just days after the July 30 announcement that Foxconn entered a strategic alliance with Taiwanese company TECO Electric & Machinery designed to help the two companies pursue AI datacenter business worldwide.

TECO makes energy infrastructure needed to build datacenters, and Foxconn makes … well … almost anything its customers want, which is often servers and other datacenter hardware.

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Foxconn has already committed to expand its US presence so it can make AI hardware for Apple and other local customers. Flipping the Lordstown plant from EVs to AI therefore advances the Taiwanese company’s AI ambitions.

But the company has also promised to build an electric vehicle reference platform so it can win work from automakers.

The future of that plan is now unclear. But Foxconn has form walking away from big plans, as happened when it failed to deliver on a promise to build a giant LCD display manufacturing plant in Wisconsin.

LCD displays aren’t a hot market today. Foxconn’s change is, however, very much aligned with Trump administration policies that encourage foreign companies moving production to the USA and ended tax credits for buying electric vehicles. The administration also recently announced a laissez faire AI policy designed to spark datacenter construction.

Also on Monday, EV-maker Tesla’s board announced the interim award of 96 million shares to CEO Elon Musk. At the time of writing, those shares were worth about $29 billion.

In a letter to shareholders the Board justified the award because “Retaining Elon is more important than ever before” as the company shifts from being “a leader in the electric vehicle and renewable energy industries to grow towards becoming a leader in AI, robotics and related services.”

Maybe that shift will mean Tesla also buys AI servers from Foxconn, or has the Taiwanese company make its robots. ®