Lordstown Dives After Confirming Factory Sale, Updating Endurance EV Production Plans

Lordstown stock plunged after the embattled EV startup inked a deal to sell its Ohio plant to iPhone supplier Foxconn, while updating plans to start producing the Endurance truck, its first electric vehicle.


Lordstown Motors (RIDE) said late Thursday that it will sell its factory in Ohio to Taiwan’s Foxconn for $230 million, providing the company with much-needed cash. Foxconn will buy $50 million worth of common stock in Lordstown and also will assemble Lordstown’s Endurance electric pickup truck.

The deal is contingent on both parties reaching an Endurance contract manufacturing agreement. It includes a plant-sharing agreement.

Bloomberg reported earlier this week that a deal between Lordstown and Foxconn was near.

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Lordstown bought the 640-acre, 6.2 million-square-foot factory in northeast Ohio from General Motors (GM) just two years ago for $20 million.

Taiwan’s Foxconn manufacturers iPhones for Apple (AAPL). The Lordstown deal furthers its goal to turn into a contract manufacturer for electric vehicles as well, including for Fisker (FSR).

Meanwhile, the pact gives Lordstown an established manufacturing partner, which could hasten the startup’s plans to mass produce its first electric vehicle, the Endurance, while potentially lowering costs.

But late Thursday, Lordstown said it “continues to move forward” with plans to build a limited number of Endurance EVs in the rest of 2021 and first half of 2022. It had earlier expected to launch initial production of the Endurance in late September.

Lordstown Stock, EV Stocks

Shares of Lordstown Motors tanked 14% on the stock market today, undercutting the 50-day line. Lordstown stock surged 8% Thursday on reports of the Foxconn deal But it remains deep in a correction with no buy point in sight despite a nice rally off August lows, according to MarketSmith chart analysis. GM eased a fraction Friday after posting a sharper-than-expected decline in Q3 U.S. auto sales.

Like Lordstown, some EV startups are focused on the design and technology of electric vehicles, while contracting out the actual production. Others, including Lucid (LCID), will make and deliver their own vehicles.

On Wednesday, Lucid stock surged 9% on reports that its first electric vehicle, the Air luxury sedan, is rolling off assembly lines in Arizona. The EV stock was already on a tear, after news that its Air Dream edition will beat Tesla (TSLA) on range. Lucid stock gave back a big chunk of that gain Thursday, falling 3.4%. LCID stock fell 2.3% on Friday.

Find Aparna Narayanan on Twitter at @IBD_Aparna.


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