Lordstown drops 18% after announcing production updates and a $230 million deal to sell Ohio plant to Foxconn

• Lordstown Motors stock fell 18% after providing an update to its EV production plans.
• It will move forward with building a limited number of vehicles in 2021 and the start of 2022.
• The company also announced plans to sell its Ohio plant to Foxconn for $230 million.

Lordstown Motors stock fell 18% Friday after the electric-vehicle startup provided an update to its production plans and announced the sale of its Ohio plant to Foxconn for $230 million.

In a statement, the company said it "continues to move forward with its plan to build a limited number of vehicles for testing, validation, verification and regulatory approvals during the balance of 2021 and the first part of 2022." The company will update investors on its production outlook "in light of the Foxconn agreement" on the third-quarter earnings call in November.

The pact with Foxconn will allow the companies to work in conjunction to assemble Lordstown Motors' forthcoming electric pickup truck, the Endurance, which has already faced several manufacturing delays.

As part of the deal, Foxconn is also purchasing $50 million worth of common stock directly from the company, Lordstown Motors said in a statement late Thursday.

The partnership is contingent on the two reaching a manufacturing agreement and Lordstown providing Foxconn with certain right to future vehicle programs.

"The goal of the partnership is to present both Lordstown Motors and Foxconn with increased market opportunities in scalable electric vehicle production in North America," the press release said.

Foxconn, the top assembler of Apple iPhones, has been pushing into electric vehicles this year. In May, it reached a deal to produce EVs for startup Fisker.

Daniel Ninivaggi, chief executive officer of Lordstown Motors, said "We are excited about the prospect of joining forces with a world-class smart manufacturer like Foxconn and believe the relationship would provide operational, technology and supply chain benefits to our company and accelerate overall scaled vehicle production and increase employment in the Lordstown facility."

Lordstown Motors, founded in 2018, originally purchased the highly politicized Ohio plant from GM for $20 million, Bloomberg reported, in a move that former President Donald Trump applauded at the time.

Since going public in a blank-check merger in October 2020, Lordstown has faced a series of hurdles that have hampered the share price.

The short-selling firm Hindenburg Research released a report claiming the company misled investors on demand for its electric pickup truck. The Securities and Exchange Commission launched an inquiry, and the company proceeded with its own internal investigation into the matter. The CEO and CFO resigned in June, on the same day the company's internal investigation revealed it made inaccurate statements regarding pre-orders.

Lordstown stock risen about 20% amid its three-day rally and was trading at $8.62 at 8:28 a.m. in New York. Even so, the company has lost more than half its market value year-to-date.