Lordstown Motors goes bankrupt and sues Foxconn

Lordstown Motors filed for Chapter 11 bankruptcy and is actively looking for a buyer for its entire business. This latest news is not a surprise, it’s a sad development in the saga that saw Foxconn, a mobile tech giant, become officially an automotive company while helping Lordstown Motors in design and manufacture an electric pickup truck - but only to have them collapse on the finish line.

Lordstown was yet another EV startup, and like many of them went through a series of ups and downs but it all seemed like a fairytale finish when Foxconn stepped up and promised $400 million investment to keep the company going and to help it deliver its electric pickup truck to the market.

The truck, called Endurance out of all things, eventually went into production late last year, its production was temporarily halted at the start of 2023 due to supplier-related delays.

The truck came with a 109 kWh battery pack but despite that, it only managed 174 miles of EPA-rated range - the lowest range among EVs with 100+ kWh battery pack. No surprise then that Lordstown Motors only sold 6 units last year and in total managed to manufacture only 31 Endurance trucks.

Chapter 11 should give the company plenty of time to restructure and sell its assets, especially since the business comes with no debts attached and in fact, it has decent cash reserves.

At the same time, Lordstwon Motors is suing Foxconn for a host of alleged wrongdoings. The company accuses its business partner of bad faith actions and outright fraud resulting in the Chapter 11 bankruptcy.

Out of promised $400 million, Foxconn spent $230 million buying the former GM factory, and an additional $50 million was spent to bring the Endurance truck to production. Everything fell apart when Foxconn refused to fulfill the remainder of its promise to buy additional shares from Lordstown and thus support the full rollout of the Endurance.

The lawsuit paints a rather bleak picture of a hostile corporate takeover where Foxconn appears to have lured Lordstown into an agreement it never intended to uphold.

Currently, Foxconn owns the former GM factory with all its assets. Lordstown Motors owns the Endurance truck with its homologation papers and all associated processes.

Foxconn is a manufacturing partner of Fisker and is preparing the production of Pear - Fisker’s second electric vehicle. The company has been very quiet about the Lordstown Motors investment but we can expect more details to surface once the case gets going.

Is it possible that Foxconn will buy Lordstown Motors out of Chapter 11? Absolutely, it would probably be a savvy move - shrewd, but savvy. While the corporate giants fight over who owns what, people will end up losing jobs, let’s hope not for long, and let’s hope production in Lordstown starts again soon - whether it's the Endurance pickup truck or any other EV.

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