Last week, Lordstown Motors (NASDAQ:RIDE) confirmed it has entered into a "definitive" agreement with Taiwan's Hon Hai Precision Industry (OTC:HNHPF) known as Foxconn to sell its plant which ended up being much larger than the start-up itself needed. Under the deal, the embattled electric-truck start-up will sell its Ohio plant and raise nearly $300 million. After a difficult year in which a short-seller's allegations of fraud led to the departure of the company's founder, the suffering of Lordstown's shareholders has been eased.

The fact that there's a deal isn't exactly news, as both companies at the end of September stated that they had reached an agreement.  But it's now a done deal with specified highlights. The heart of the deal is the huge Lordstown's factory that the start-up previously bought from General Motors (NYSE:GM) and that will now be sold for $230 million.

Excluding some of its own tooling, Foxconn will be its new owner. Foxconn will make a down payment of $100 million by November 18^th, additional payments of $50 million on February 1st and by April 15^th, along with the balance when the deal closes which is currently expected to be by the end of April. Before the deal closes, Foxconn will manufacture Lordstown's Endurance while the parties will work together to also complete a joint-venture deal to design and manufacture electric commercial vehicles using MH. The Mobility in Harmony open-source EV platform is backed by several Asian manufacturers.

Foxconn will be using the plant for contract manufacturing of EVs, beginning with California start-up Fisker's (NYSE:FSR) second vehicle called the PEAR. Fisker's first EV is an electric SUV called the Ocean that  will be built under contract by a unit of Magna International Inc (NYSE:MGA).

The dominant North American player when it comes to pickups has its own electric model scheduled to debut next spring, along with a special version optimized for fleets. Moreover, the pricing of Ford Motor Company (NYSE:F)'s F-150 Lightning Pro will begin at $40,000, undercutting Endurance's announced price by $15,000. A better-equipped and longer-range version of the Lightning Pro will be priced at $50,000, which still beats the Endurance's announced $55,000 starting price by a significant margin.

EV startups have a daunting task at hand as they try to compete with Tesla Inc (NASDAQ:TSLA) and legacy automakers who are going electric. Unlike them, they do not enjoy economies of scale, they do not have the expertise that has been gained through time nor the existing global distribution network. As always, only a few will succeed in carving out a profitable niche for themselves.

The embattled EV start-up is battling with ongoing global supply disruptions and shortages. Perhaps naming its electric pickup "Endurance" is what sealed its fate as the saying goes: one must endure what one cannot cure. In this case, it is the shortage of raw materials and parts, along with international transport challenges that forced Lordstown to push Endurance's production timeline to the following quarter. Through the deal, the cash-strapped electric vehicle start-up has at least gotten its much-needed capital, while Taiwan-based electronics manufacturer got what it needs to start producing fully electric trucks.

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