Shares of Lordstown Motors rose more than 23% on Thursday after the electric car startup said it had closed its deal with Taiwanese maker Foxconn to sell its Ohio facility. The Taiwanese firm has confirmed that it will build Fischer’s Peer compact car models from 2024, along with Ohio convenience endurance.
Danny Hewson, an analyst at AJ Bell, said the termination of the deal had bought Lordstown Motors a number of much-needed breathing homes and allowed its electric pickup production to succeed.
“Building electric vehicles is an expensive business at the best of times. The supply crisis is making life incredibly difficult at the moment and Lordstown Motors and its shareholders will feel a sense of relief today,” Hewson added.
Establishing production lines for electric vehicles is a capital-intensive process, and in the past startups have struggled to raise enough capital to mass-produce vehicles.
Foxconn will now build Lordstown Motors’ endurance electric pickup truck, which will go into production in the third quarter of the year and will be in the hands of customers in the fourth quarter.
Lordstown Motors will retain some assets, including its hub motors, battery assembly lines and intellectual property. The company said the closure resulted in আয় 260 million in revenue, including reimbursement for certain operating and expansion costs.
The stock fell more than 95% from a high of $ 30 per share in September 2020, just weeks after merging with a blank check company. It is currently trading below 2.
Reporting by Akash Sriram and Bansari Mayur Kamdar in Bangalore; Edited by Krishna Chandra Iluri