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Lordstown Motors Stock Jumps Following Foxconn News -Breaking

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© Reuters

Sam Boughedda

Investing.com – Lordstown Motors (NASDAQ) stock rallied in early Thursday trading following news it has completed a deal to sell some assets to Foxconn.

Lordstown’s shares opened at $1.85 on Thursday. The price of the shares is currently at $1.77. This represents an 16% increase over Wednesday’s closing.

Lordstown’s Ohio car assembly plant will be sold to Foxconn (TW) for $230million. Foxconn will reimburse some operating and expansion expenses from the close date of September 1, 2021. Lordstown will receive approximately $260million in proceeds from the asset acquisition agreement. 

Funds will be used to purchase the Endurance pickup truck. 

Foxconn and Lordstown Motors entered into a supply agreement to produce the Endurance. 

They anticipate that the Endurance will begin commercial production in the third trimester, and the first commercial deliveries in the fourth. Foxconn will be taking over the manufacturing operation at Lordstown.

Additionally, both companies entered into joint venture agreements to jointly develop future electric vehicles. Foxconn will own 55% of the new joint venture, while Lordstown will hold 45%. 

Lordstown Motors CEO Daniel Ninivaggi stated, “Our strategic partnership to Foxconn gives LMC a flexible business model that is less capital-intensive, broad supply chain capabilities, and an efficient vehicle development platform to get EVs on the market quicker and more efficiently.”

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