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

Lordstown Motors Corp's 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 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 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 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 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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