Actions of the manufacturer of electric vehicles in difficulty Lordstown Engines (NASDAQ:STROLL) are up 13% in today’s pre-market session after the company announced a deal that will see the Taiwan-based company Foxconn buy its vehicle assembly plant in Ohio for $ 230 million.

News of the assembly plant sale is a much needed lifeline for Lordstown Motors, which has struggled to meet production and financial targets. Its stock price has fallen 73% this year before today’s bullish reversal.

RIDE stock traded yesterday at $ 5.56 per share. Analysts praised the deal when it was announced, saying it would give the cash-strapped electric vehicle startup a much-needed injection of capital. It also gives Foxconn a boost in the production of its own electric trucks.

What happened with RIDE Stock

According to a joint statement, Foxconn acquired $ 50 million of common stock at $ 6.90 per share. As a result, Foxconn will now make a $ 100 million down payment on the plant by November 18. Then it will make two payments of $ 50 million each in February and April.

Foxconn will then obtain 1.7 million warrants to buy RIDE shares at $ 10.50.

Additionally, Foxconn agreed to enter into a manufacturing deal to assemble Lordstown Motors’ first vehicle, an electric pickup truck named Endurance. The deal will allow Lordstown Motors to offload its 6.2 million square foot manufacturing facility in Lordstown, Ohio, which is largely idle.

News of the Foxconn deal and cash injection comes as Lordstown Motors prepares to report third quarter financial results after market close today. In its previous quarterly report, Lordstown Motors reported a net loss of $ 108 million, a loss of 61 cents per share, much larger than a loss of 11 cents per share a year earlier.

Why is this important

Providing Lordstown Motors with immediate payment is essential. Indeed, following a short seller’s report alleging forging pre-order numbers, RIDE is under investigation by both the United States Securities and Exchange Commission and the Department of Justice. The accusations and investigations have led to the resignation of several senior executives at Lordstown Motors, including chairman Rich Schmidt, who resigned yesterday ahead of the announcement of the deal with Foxconn.

Foxconn is currently the largest electronics maker in the world and this latest deal could help Lordstown Motors lower its raw material and component costs. However, Foxconn also has a history of over-promises and under-deliveries when it comes to the US market. One example is when Foxconn pledged to invest $ 10 billion in a manufacturing plant in Wisconsin. He ultimately reduced that investment and failed to create the number of jobs promised.

What’s next for Lordstown Motors

The immediate next step is for Lordstown Motors to release its third quarter results at market close today.

These results should show further losses. While the deal with Foxconn helps provide Lordstown Motors with temporary financial relief, it does not change the underlying history of the company, which continues to be negative. Investigations of fraud, production shutdowns, cumulative losses and senior management resignations do not paint a rosy picture. As such, investors should continue to avoid distressed RIDE stocks, which have had a downward trajectory this year.

At the date of publication, Joël Baglole did not hold (directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, submitted to InvestorPlace.com Publication guidelines.