Lordstown Motors has entered into an in-principle settlement to promote its huge meeting plant in Ohio to iPhone maker Foxconn for $230 million, the businesses introduced late Thursday.

Below the deal, the Taiwan-based electronics contract producer will assemble Lordstown Motors’ first product, an all-electric pickup truck referred to as the Endurance, that the corporate was making ready to provide and promote starting subsequent yr.

Promoting the plant to Foxconn, also called Hon Hai Expertise Group, will present capital for the cash-strapped electrical car start-up, whereas giving Foxconn a leap begin to producing EVs. Foxconn additionally has a take care of start-up Fisker to provide EVs within the coming years.

“The partnership would permit Lordstown Motors to benefit from Foxconn’s intensive manufacturing experience and cost-efficient provide chain, whereas releasing up Lordstown Motors to deal with bringing the Endurance to market, creating service choices for our fleet prospects and designing and creating modern new car fashions,” Lordstown CEO Daniel Ninivaggi stated in a press release.

Bloomberg first reported the businesses have been “close to an settlement” earlier within the day, sending Lordstown shares up by as a lot as 21% on Thursday earlier than retreating to shut at $7.98, up 8.4%. The inventory elevated by one other 7.4% throughout after-hours buying and selling.

Below the proposed deal, Foxconn additionally will buy about $50 million of Lordstown frequent inventory. The EV start-up plans to then enter right into a long-term lease for a portion of the previous Normal Motors plant, and Foxconn will provide jobs to Lordstown operational and manufacturing staff.

“Along with attaining the purpose of shifting forward our timeline to determine electrical car manufacturing capability in North America, it additionally displays Foxconn’s flexibility in offering design and manufacturing providers for various EV prospects,” Younger Liu, chairman of Hon Hai Expertise Group, stated in a press release.

Lordstown has been strapped for money because it makes an attempt to start manufacturing of the Endurance. The corporate in June stated there was “substantial doubt” about its potential to proceed as a going concern within the subsequent yr due to issues funding the manufacturing of the Endurance.

Whereas Taiwan-based electronics contract producer Foxconn is greatest recognized for iPhone manufacturing, it is making an attempt to broaden its manufacturing to electrical autos.

Fisker CEO Henrik Fisker stated the deal might permit it to drag forward availability of its deliberate car with Foxconn, referred to as Challenge PEAR, from the primary quarter of 2024.

“We will perhaps deliver the PEAR a little bit bit faster to market,” he stated Friday throughout CNBC’s “Squawk Field.” “It is a actually good plant for us.”

Lordstown Motors bought the 6.2 million square-foot huge facility in Lordstown, Ohio, in 2019 from Normal Motors, which ceased operations on the plant as a part of a restructuring plan. The beginning-up reportedly purchased the ability for $20 million, a fraction of its general worth, and GM has assisted the corporate each financially and operationally with suppliers.

GM owns 7.5 million shares of Lordstown Class A typical inventory. It obtained the shares in alternate for fairness worth of $75 million within the EV firm, most of which have been in-kind providers and linked to the sale of the property.

Other than its monetary troubles, Lordstown is underneath investigation by the Securities and Trade Fee and Division of Justice relating to its deal to go public in addition to doubtlessly false or deceptive statements from former administration, together with firm founder and ex-CEO Steve Burns.

Burns and his CFO left the SPAC-backed firm in June after an inner investigation discovered “points relating to the accuracy of sure statements” round Lordstown’s preorders, particularly the seriousness of the orders and who was making them.

In Could, brief vendor Hindenburg Analysis stated the corporate misled buyers, together with utilizing “pretend” orders to lift capital for its Endurance electrical pickup. The brief vendor additionally stated the pickup was years away from manufacturing. Lordstown has maintained it is on monitor to start out making the car in September.

Lordstown beforehand stated the inner investigation discovered Hindenburg’s report “is, in important respects, false and deceptive.”