Green Car

Lordstown files bankruptcy, suing Foxconn

Lordstown Motors Corporation has fallen apart.

On Tuesday, the electric truck startup filed for bankruptcy protection and listed itself for sale. The moves come after the automaker disclosed its Taiwan partner, Foxconn, was looking to back out of the needed funding deal.

Lordstown said it’s looking to sell the Endurance electric truck and related assets to a willing buyer.

The automaker subsequently filed a complaint and is suing Foxconn for fraud, bad faith, and repeated contractual breaches, all of which the company claims hurt its value.

Lordstown said a letter from Foxconn it received in April alerted the truck maker that a breach of contract had occurred in the funding deal because its stock had fallen under $1 per share for 30 consecutive days. That in turn triggered a delisting notice from NASDAQ.

Foxconn, a Taiwanese contract manufacturer, bought Lordstown’s factory in 2022 for a purported $230 million. In a subsequent second deal Foxconn agreed to invest up to $170 million in Lordstown, which CNBC calculated as $19.3% stake in the U.S. company.

Foxconn reportedly paid only the first $52.7 million of the second deal. An additional $47.3 million that was due in May failed to arrive.

Best known as the contract manufacturer for the Apple iPhone, Foxconn has been moving into EV production. The company has also been contracted to build the Fisker Pear.

In March, Lordstown paused Endurance production due to a recall. The issue affected 19 vehicles already in customer’s hands.

Original sales targets for the Endurance were 50 units in 2022 and 500 in 2023, but as of March only six had been sold this year with approximately 40 trucks having been completed or in the process of assembly.

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