Electric truck maker Lordstown Motors files for bankruptcy, sues Foxconn
Lordstown Motors' main product is Endurance electric pickup truck
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Lordstown Motors filed for Chapter 11 bankruptcy protection on Tuesday and subsequently took legal action against Foxconn after failing to resolve a dispute over a promised investment from the Taiwanese manufacturer.
The Ohio-based electric truck maker accused Foxconn of fraudulent conduct and a series of broken promises in failing to abide by an agreement to invest up to $170 million in the electric vehicle manufacturer.
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Foxconn holds an 8.4% stake in Lordstown Motors through a previous investment of roughly $52.7 million.
The logo of Foxconn is seen outside the company's building in Taipei, Taiwan Nov. 10, 2022. (REUTERS/Ann Wang / Reuters Photos)
Lordstown says Foxconn is balking at buying the remainder of shares and misled the EV company about its commitment to vehicle development plans.
"As one of the early entrants to the EV industry, we have delivered the Endurance, an innovative and highly-capable EV with significant commercial and retail potential – and had subsequently engaged with Foxconn in a purposeful, strategic partnership to leverage this expertise into a broader EV development platform," Lordstown Motors CEO Edward Hightower said in a statement.
In this June 22, 2021, file photo, the Lordstown Motors Baja truck is displayed during a media tour to the Lordstown Motors complex in Lordstown, Ohio. (AP Photo/David Dermer)
"Despite our best efforts and earnest commitment to the partnership, Foxconn willfully and repeatedly failed to execute on the agreed-upon strategy, leaving us with Chapter 11 as the only viable option to maximize the value of Lordstown's assets for the benefit of our stakeholders," he added. "We will vigorously pursue our litigation claims against Foxconn accordingly."
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The automaker's main product is the Endurance electric pickup truck, which is built at a former General Motors small-car factory in Lordstown, Ohio, for commercial customers such as local governments. Lordstown sold the plant to Foxconn in 2022.
Lordstown paused production of the Endurance earlier this year and since April has resumed building the trucks at a low rate after resolving quality issues with suppliers.
Should Lordstown fail to find a rescuer willing to re-start full production of the Endurance, the Ohio factory could be a draw for overseas automakers looking for a quick way to build vehicles in the United States.
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Lordstown also said it anticipates that the restructuring will enable an expedited timeline for hearing the company’s litigation against Foxconn.
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In response, Foxconn said in a statement that Lordstown Motors has "continuously attempted to mislead the public and has been reluctant to perform the investment agreement between the two parties."
Foxconn also called the accusations "malicious attacks" and is reserving the right to pursue its own legal actions while "suspending all good faith negotiations."
Reuters contributed to this report