The troubled project in Mount Pleasant has a new problem: a state law banning automakers from selling directly to consumers.
The latest potential plans for Foxconn Technology Group’s facility in Mount Pleasant—to turn the site into an electric vehicle factory—are in jeopardy. But this time, it’s not Foxconn’s wishy-washy commitment to Wisconsin that could be endangering a salvage job of the failed megaproject; instead, it’s a state law prohibiting auto manufacturers from selling directly to consumers.
Fisker, the electric vehicle company that Foxconn has partnered with for manufacturing, strongly desires the ability to perform direct sales in whatever state the vehicles end up being built. Current law says vehicle sales can only be done through a state-licensed dealership. (Individuals may sell up to five of their own vehicles each year without a dealer license.)
An auto factory at the massive, mostly vacant site in Racine County would be a major win for the state after nearly four years of missed deadlines and abandoned commitments from Foxconn. However, it’s unclear if there is political will among lawmakers, state agencies, and Gov. Tony Evers to get the law change done, and it’s also not clear if it would be a total dealbreaker for Fisker and Foxconn if the law isn’t changed.
“We are going to be investing with Foxconn a lot into this project, and we want to be building cars in a state that will allow us to sell those cars,” Simon Sproule, senior vice president of communications for Fisker, told UpNorthNews in an interview.
Fisker CEO Henrik Fisker told Forbes this week that if Wisconsin changed its vehicle sales law, “they will be in the lead, but right now they’re not.”
Sproule partially walked that back and told UpNorthNews the Wisconsin site is still a “strong contender; however, what’s important for us is the ability to be able to sell to customers in the state where we make the vehicle.”
Under the agreement between Foxconn and Fisker, the Taiwanese tech giant will manufacture vehicles for Fisker’s Project PEAR (Personal Electric Automotive Revolution), which aims to produce electric vehicles at a sub-$30,000 price point.
Fisker is in active discussions with officials at a state level, Sproule said, but he did not provide specifics as to who the company is engaging with. He said Fisker is making officials aware of the concern in any state the company considers.
The Legislature included a change to the dealership requirement in the 2019-21 state budget, but Evers used his veto power to nix that provision because, he said, it was “a payoff” to secure the vote of Sen. Chris Kapenga (R-Delafield), who runs a Tesla parts and electric-vehicle salvage business.
The Wisconsin Economic Development Corp. and state Department of Administration, both of which were heavily involved with crafting and upholding the initial and reworked state contracts for Foxconn, declined to comment on the current situation with Fisker.
Assembly Speaker Robin Vos (R-Rochester), whose district includes the Foxconn development, did not respond to requests for comment left at his office and cell phone. Evers’ office, a spokesperson for Senate Majority Leader Devin LeMahieu (R-Oostburg), and Foxconn also did not respond to requests for comment.
Fisker, the CEO, told Forbes the final location “is still Foxconn’s decision.” But Sproule told UpNorthNews the car company is “very involved” in the site selection process and has “a strong voice.”
Foxconn’s existing Mount Pleasant campus—anchored by a 1-million-square-foot industrial building that as of last year was permitted for use as a storage facility—is not adequate for a car factory, Sproule said, so the companies will need to construct new facilities for whichever site they ultimately choose. However, Foxconn’s existing footprint in Wisconsin means the location remains one of the top options, Sproule said.
Fisker and Foxconn previously said the manufacturing location would be announced in July, but they missed that deadline. Sproule said he now expects the announcement in “weeks, not multiple months,” so the company remains on track to begin production in 2023.
When Foxconn first came to an agreement with state and local government in 2017, it promised a $10 billion megafactory that would produce large LCD panels and employ 13,000 people; in exchange, the state would cough up almost $3 billion in tax credits.
However, the company quickly scaled back the plans, and LCD manufacturing was eventually abandoned entirely before Evers’ administration this year reworked the deal. Now, Foxconn is obligated to produce a more realistic $672 million facility and hire about 1,450 people in exchange for $88 million in subsidies; there is no contractual obligation for Foxconn to produce a specific product.