Lordstown Motors, the U.S. electric truck manufacturer, has filed for bankruptcy protection and initiated legal action against Taiwan company Foxconn. The Ohio-based company, named after its headquarters’ location, filed for Chapter 11 protection in Delaware, citing a failed investment agreement with Foxconn.
According to Lordstown’s complaint filed in bankruptcy court, Foxconn is accused of fraudulent conduct and breaching promises to invest up to $170 million in the electric-vehicle manufacturer. Lordstown claims that Foxconn has not fulfilled its commitment to purchase additional shares and has misled them regarding collaboration on vehicle development plans.
The bankruptcy filing and lawsuit create a cross-border business clash that may draw attention to Foxconn’s EV ambitions and partnerships with other automakers. Lordstown’s main product, the Endurance electric pickup truck, is manufactured at a former General Motors factory and sold to commercial customers. The factory was sold to Foxconn in 2022.
While Lordstown seeks a buyer and plans to restart full production of the Endurance, the factory’s ownership by Foxconn could attract overseas automakers interested in quick entry into the U.S. EV market. The company does not currently have a stalking-horse bidder, setting the stage for an auction process.
Lordstown’s bankruptcy adds to the challenges faced by EV startups that went public during the SPAC boom. Despite its high-profile position and location, Lordstown struggled to meet expectations and faced controversies, including the resignation of its CEO Stephen Burns and overstating pre-orders for its electric trucks.
As the EV market continues to evolve with the introduction of new players, Lordstown’s bankruptcy highlights the competitive landscape and the difficulties faced by emerging companies in the industry.