By Sam Boughedda
Investing.com -- Lordstown Motors (NASDAQ:RIDE) stock rallied in early Thursday trading following news it has completed a deal to sell some assets to Foxconn.
Shares of struggling EV maker Lordstown opened Thursday's session at $1.85. At the time of writing, they are trading around the $1.77 mark, up more than 16% from Wednesday's close.
Lordstown will sell its Ohio vehicle assembly plant to Foxconn (TW:2354) for $230 million, plus the reimbursement of certain operating and expansion costs from September 1, 2021, to the closing date. In total, the asset purchase agreement results in approximately $260 million in proceeds for Lordstown.
The funds will help it begin production of its Endurance pickup truck.
As part of the deal, Foxconn and Lordstown Motors have entered into a manufacturing supply agreement for the Endurance.
They expect to start commercial production of the Endurance in the third quarter, with the first commercial deliveries scheduled in the fourth quarter. Foxconn will assume manufacturing operations at the Lordstown plant.
Furthermore, the companies have also entered into a joint venture agreement to co-develop future electric vehicles. The new joint venture will be 55% owned by Foxconn and 45% by Lordstown.
"Our strategic partnership with Foxconn provides LMC with a flexible and less capital-intensive business model, access to broad supply chain and software capabilities and an effective vehicle development platform to bring EVs to market faster and more efficiently," stated Daniel Ninivaggi, CEO of Lordstown Motors.