Lordstown Motors Corporation has filed for bankruptcy protection and is suing contract manufacturing partner Foxconn, the company announced Tuesday.
Lordstown filed for Chapter 11 protection in a Delaware bankruptcy court. The company also filed a legal complaint against Foxconn, the manufacturing arm of Taiwan’s Hon Hai Technology Group best known for making the Apple iPhone, accusing the company of fraud and failing to meet financial commitments.
The automaker was formed to take over the former General Motors factory in its namesake Ohio town and use the plant to manufacture an electric pickup truck called the Endurance. Lordstown sold the plant to Foxconn in 2021 for a purported $230 million as part of a deal that called for Foxconn to manufacture the Endurance under contract, as well as invest in Lordstown, and for the two companies to co-develop future vehicles.
2023 Lordstown Endurance
Lordstown now alleges that Foxconn “had no intentions of living up to its commitments, particularly with respect to the new vehicle development platform.” The company claimed Foxconn used its partnership with Lordstown” as a tool to maliciously and in bad faith destroy Lordstown’s business.”
Endurance production began last fall, but Lordstown disclosed that only 31 trucks were built, and 19 recalled, before production was halted in February. The company said in April that production had resumed.
In the interim, Lordstown said it was shifting focus to its next EV, which would be based on a Foxconn platform. But Lordstown in May warned of bankruptcy if Foxconn followed through with a threat to pull funding for the automaker.
2023 Lordstown Endurance
In a deal made last November, Foxconn agreed to invest up to $170 million in Lordstown in return for shares in the company. Foxconn previously invested $52.7 million in Lordstown as part of the agreement, giving it an 8.4% stake, Reuters noted. An additional $42.7 million due in May was not paid. Lordstown has been accusing Foxconn of balking at further investment in line with the deal, while Foxconn has accused Lordstown of breaching the terms of the deal when the automaker’s stock fell below the $1 per share threshold (for 30 days) required for listing in the Nasdaq.
Foxconn is pivoting to making its own EVs, albeit likely for other markets, and has other planned uses for the Ohio factory. It has contract-manufacturing agreements with other automotive startups, including IndiEV and Fisker.
