Lordstown Motors Files for Bankruptcy, Sues Foxconn for ‘Bad Faith’
Written by Iulian Dnistran, InsideEVs
Published June 27, 2023
Ohio-based Lordstown Motors, the maker of the Endurance all-electric pickup truck, has filed for Chapter 11 bankruptcy and is looking for a new owner, the company announced June 27. Furthermore, the startup has filed a lawsuit against its main investor, Foxconn, claiming that the technology company committed fraud and consistently failed to live up to its commercial and financial commitments.
Late the previous week, it was reported that ex-CEO and founder of Lordstown Motors Stephen Burns sold all of his remaining stock in the EV startup in three separate transactions between May and June.
Prior to this, Lordstown said it was considering suing its Taiwanese investor after it allegedly stalled the acquisition of additional shares amounting to roughly $47 million, which could have kept the EV maker afloat. Without the extra capital, Lordstown anticipated in May it would cease production of the Endurance “in the near future” and saw bankruptcy as a worst-case scenario.
Now, that scenario has come true. In the court filing against Hon Hai Technology Group, including its affiliate Foxconn Ventures, Lordstown said the investor “had no intention of living up to its commitments, particularly with respect to the new vehicle development platform.”
As part of the agreement between Lordstown and Foxconn, Lordstown received an investment of roughly $50 million out of a planned total of $170 million, which gave the company much-needed capital and helped the Taiwanese tech firm to establish itself as an automobile manufacturer. Furthermore, Foxconn paid an additional $230 million to Lordstown to buy the former GM factory where it operated, where it planned to build the Endurance electric pickup under contract.
Under the Chapter 11 restructuring process, Lordstown is looking to sell the Endurance vehicle and related assets, calling it “a fully homologated and certified, production-launched vehicle that can serve as a springboard for the right OEM or other strategic purchaser into the broader North American EV full-size truck market at a fraction of the cost and time it would take to develop a program from the ground up.”
Production of the Lordstown Endurance began in the third quarter of 2022, but was temporarily halted in the first quarter of 2023 because of supplier-related issues. Assembly restarted at a very low pace in April, but the company reportedly delivered only six vehicles this year and manufactured a total of 31.
Powered by in-wheel hub electric motors that get juice from a 109-kilowatt-hour battery pack, the Endurance pickup has an EPA-rated driving range of 174 miles, one of the lowest range results among BEVs, and the lowest range for BEVs with 100+ kWh battery.
Lordstown Motors said it enters Chapter 11 with “significant cash on hand and is debt-free.”