Electric truck startup Lordstown Motors has filed for bankruptcy and also sued partner Foxconn, accusing the contract manufacturer of fraudulent conduct and breach of contract. Lordstown intends to restructure by auctioning its assets, including the rights to its Endurance EV pickup truck. The company plans to seek a buyer but doesn't have offers yet. In 2019, Lordstown Motors acquired General Motors' Ohio factory to manufacture electric pickup trucks. - Two years later, Lordstown sold that factory to Foxconn, a top iPhone manufacturer and one of the world's biggest electronics manufacturers.
- Under their partnership, Foxconn agreed to manufacture the Endurance electric pickups at the factory and make additional investments.
- After closing the initial deal in 2022, Lordstown and Foxconn entered into a second agreement where Foxconn would invest up to $170M in Lordstown, acquiring a 19.3% stake.
- Foxconn paid the first installment of $52.7M but failed to pay the remaining $47.3M.
- Foxconn accused Lordstown of breaching the agreement by allowing its stock price to drop below $1 per share.
Lordstown, which went public through a SPAC in 2020, previously saw a significant rise in its stock value, fueled in part by former President Donald Trump's endorsement. - However, investor focus shifted to profitability, and the company struggled to deliver on sales.
|
