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Tesla Rival Says it Will Build $30K Electric SUV in Ohio

Now that a star-crossed deal has closed, new plans are being rolled out to compete with the sector's king.

One of the biggest stories in the EV world continues to be if Lordstown Motors  (RIDE) - Get Lordstown Motors Corp. Class A Report agreement to sell its Ohio manufacturing to Taiwan-based Foxconn  (FXCOF)  will go through. 

The 6.2-million-square-foot manufacturing facility had previously belonged to General Motors  (GM) - Get General Motors Company Report.

It offers the necessary infrastructure to potentially manufacture hundreds of thousands of cars a year. 

At one point, the facility employed over 4,500 people.

While the deal has been up in the air amid closing negotiations and delays, Foxconn and Lordstown Motors eventually closed it for a final price of $230 million. 

Days later, it is also promising to start rolling out a flashy-yet-affordable electric vehicle.

Is The PEAR A Fruit?

As part of its partnership with electric car manufacturer Fisker  (FSR) - Get Fisker Inc Class A Report, Foxconn first announced the Personal Electric Automotive Revolution (PEAR) in February 2021 with a starting price below $30,000.

On May 12, the company started teasing a second PEAR, this time an electric SUV that will be built at the Lordstown factory. 

The electronics company is promising the same $29,900 price before any tax incentives offered by municipalities to encourage residents to go electric.

“The exterior design will feature new lighting technology and a wraparound front windscreen inspired by a glider plane glass canopy, enhancing frontal vision,” Fisker Chairman and CEO Henrik Fisker said in a statement.

The company calls it the fancy-sounding “agile urban EV” but did not release much detail on specific features or capabilities.

While production will not start until 2024, Fisker is accepting $250 reservations for those who want to get onto the waitlist early. 

Once production speeds up, the company is hoping to make over 250,000 models. 

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“Our engineering group is working on new features and high-tech solutions for the PEAR that will change how we use and enjoy a vehicle in the city,” Fisker said, also announcing plans to visit the Ohio facility later this week to monitor progress. 

The Lordstown Plant Has Big Promise

The sale of the Lordstown factory was presented by much fanfare from the company. 

Immediately after the deal was first announced in 2021, shares of Lordstown surged.

Today’s announcement was also met with big changes to the market.

While company shares are down 18.08% in the last month, they rose by more than 47% after the company completed its acquisition.

Fisker shares, meanwhile, also jumped nearly 13% amid news of the new PEAR. 

Will Tesla Lose Its Crown?

The car company known for luxury vehicles has been attempting to establish steady footing in the EV space, hoping to be one of many to push Tesla  (TSLA) - Get Tesla Inc Report's out of dominance. 

While Teslas accounted for 79% of all electric vehicles sold in 2020, hundreds of new models and thousands of cars are expected to hit the market by 2025.

Affordability will also be a draw-in for many buyers, since many buyers still associate EVs with the cost of a Tesla.

New ownership will surely ramp up production of EVs like the PEAR but actually seeing them on the market may take time. 

New car models often face delays in regular periods and, with supply chain disruption caused by the pandemic, could see even more of them.

“Building electric vehicles is an expensive business at the best of times,” AJ Bell analyst Danni Hewson told Reuters. 

“Right now the supply crunch is making life incredibly difficult and Lordstown Motors and its shareholders will be feeling a rather heady sense of relief today.”