Stock Groups

Lordstown Motors shares surge after it sells assets to Foxconn -Breaking

[ad_1]

© Reuters. The Lordstown Assembly Plant, Lordstown, Ohio (USA), June 21st, 2021, is seen with a Lordstown Motors sign. REUTERS/Rebecca Cook

(Reuters) – Lordstown Motors share prices surged more than 23% on Thursday morning after Foxconn, an electric vehicle startup announced that it has closed the sale of its Ohio plant to Foxconn.

Rising material and supply costs are affecting the EV industry’s ability to increase production in order to satisfy the demand for electric cars in America. This is despite surging fuel prices.

Lordstown Motors will have some breathing space and production of the electric pickup can be restarted, according to Danni Hewson analyst at AJ Bell.

Building electric vehicles can be a costly business even at times. Hewson added that the current supply crunch is making it extremely hard and Lordstown Motors as well its shareholders will feel an incredible sense of relief right now.”

It is expensive to set up production lines for electric cars. Startups in the past struggled to raise enough capital to produce mass quantities of vehicles.

Foxconn will manufacture the Lordstown Motors Endurance electric pickup truck. It will be available for production by the end of the year.

Fisker Inc will make the compact Fisker Inc model PEAR from Taiwan starting in 2024, along with the Endurance at its Ohio plant.

Lordstown Motors retains some assets such as its hub motor, batteries assembly lines, and intellectual property. According to the company, the transaction closed with $260 million in proceeds. This includes reimbursements for certain expansion and operating costs.

It fell 95% over its September 2020 high of $30 per shares, just weeks after it went public via a merger. It currently trades below $2

For an interactive graphic, click here https://tmsnrt.rs/3FI1dWm.

[ad_2]