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Why Lordstown Motors (RIDE) Stock Is Up 22% Today

By Rachit Vats

Lordstown Motors Corp's (NASDAQ:RIDE) stock is trading 21.8% higher at $1.84 in the premarket session on Thursday.

What Happened: The beleaguered electric vehicle startup said on Wednesday it has closed a $230 million deal to sell its Ohio factory to Taiwan’s Hon Hai Technology (OTC:HNHPF), better known as Foxconn, sending its shares higher after the bell.

The deal will infuse Lordstown Motors with the much-needed cash to continue the development of its Endurance electric pickup.

Lordstown Motors had in November entered an agreement with Foxconn for the sale of its Ohio facility, a former General Motors Co (NYSE:GM) factory. 

The EV maker said said Foxconn would build the Endurance pickup truck at the facility under contract, besides other vehicles including Fisker Inc’s (NYSE:FSR) low-cost model that’s expected to be launched in 2024.

Why It Matters: The crucial deal lends Lordstown a fresh breath of air since — if the deal had not gone through — it would have been then forced to pay back $200 million Foxconn gave it as a downpayment over several months. The deal was initially expected to close in April but was pushed back. 

The two companies also announced a joint venture named MIH EV Design LLC in which Apple Inc (NASDAQ:AAPL) supplier Foxconn will own 55% and the rest would be owned by Foxconn.

Taiwan-based Foxconn will commit $100 million to the joint venture, including a $45 million loan to Lordstown, to build a lineup of electric pickup trucks.

Photo: Courtesy of Trump White House Archive via Flickr

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Dive Deeper:
Foxconn Completes Ohio Plant Purchase, Endurance EV May Be Delayed
As part of the deal, Foxconn also assumes the responsibility for assembling the Endurance electric pickup and hires 400 manufacturing…
Foxconn faces covid logistics disarray in China
As China works to contain outbreaks, the world’s biggest iPhone assembler said most of its factories in the country are…
Why Lordstown Motors Shares Are Sliding Today
Lordstown Motors Corp (NASDAQ:RIDE) reported a first-quarter FY22 loss per share of $(0.46), in line with the consensus of $(0.46) and against…
Fisker Teases Pear Compact EV, Announces Production In Ohio In 2024
Fisker projects the Pear to have a starting price of $29,900.
One subscription that gives you access to news from hundreds of sites
Morning Brief: Top Financial Stories Dominating on Thursday, May 12
CNBC Instacart Confidentially Files For US IPO
EV Week In Review: Elon Musk Shrugs Off China Shocker, Tesla India Plans On Backburner, Lordstown Gets Lifeline, Canoo Sinks On Going Concern Warning And More
The EV space was broadly lower in the week ending May 13, although closing off their lows. The industry took cues…
Get all your news in one place