Home News Lordstown Motors Files for Bankruptcy and Sues Foxconn

Lordstown Motors Files for Bankruptcy and Sues Foxconn

by admin
Lordstown Motors Bankruptcy

Today marks a significant turn of events for Lordstown Motors. The electric vehicle (EV) startup, based in Ohio, has lodged a Chapter 11 bankruptcy filing with hopes of attracting a buyer. Concurrently, the company is taking its investment partner, Foxconn Technology, to court on charges of contract breach and fraud. Lordstown alleges that Foxconn’s activities were purposefully damaging, leading to the ruin of the American startup’s business.

Foxconn, widely recognized as Apple’s iPhone assembler, became the owner of Lordstown’s Ohio plant in late 2021, coinciding with General Motors’ departure. A year following this, Foxconn agreed to a further investment of $170 million through acquiring common and newly minted preferred shares. However, in April, Foxconn hinted at terminating the agreement, attributing this to Lordstown’s shares consistently dipping below $1 for 30 successive trading days, which they viewed as a contract violation. Lordstown rebuffed these accusations as baseless, charging Foxconn with an attempt to dishonestly gain control of the plant and its workforce, with no real intention to back Endurance, its premier pickup EV.

The move to file for bankruptcy hardly comes as a shock — in May, Lordstown indicated that production was set to cease “soon” and that bankruptcy proceedings would follow if the Foxconn agreement did not progress. The company also disclosed a net loss of $171.1 million for the first quarter of 2023.

Endurance, the vehicle, has also had an ongoing stream of issues from the production phase to the final product. Despite Foxconn’s acquisition of the plant, Lordstown fell short of the anticipated vehicle production targets for 2022, slashing it from 500 to merely 50 trucks. An underperformance in mileage soon followed, with the Environmental Protection Agency recently evaluating the pickup’s range to be just 174 miles, a significant drop from the originally promised 250. In comparison, rivals like the Ford F-150 Lightning and the Rivian R1T boast ranges of 240 and 289 miles, respectively.

Frequently Asked Questions (FAQs) about Lordstown Motors Bankruptcy

Why is Lordstown Motors filing for bankruptcy?

Lordstown Motors is filing for Chapter 11 bankruptcy in an attempt to find a buyer for the company. This comes after a series of setbacks including persistent production issues, failing to meet the forecasted vehicle production numbers for 2022, and reporting a net loss of $171.1 million for the first quarter of 2023.

Who is Lordstown Motors suing and why?

Lordstown Motors is suing its investment partner, Foxconn Technology, on charges of contract breach and fraud. According to Lordstown, Foxconn threatened to terminate their deal due to Lordstown’s stock price dropping below $1 per share for 30 consecutive trading days, which Foxconn interpreted as a breach of their agreement. Lordstown has refuted these claims and accused Foxconn of acting dishonestly to gain control of the plant and its workforce.

What problems has Lordstown Motors’ vehicle, Endurance, faced?

Endurance has encountered a host of issues, from production to the final product. Lordstown failed to meet its forecasted vehicle production numbers for 2022, reducing it from 500 to just 50 trucks. The pickup’s range was also underperforming, rated at just 174 miles by the Environmental Protection Agency, despite a promised range of 250 miles.

What were Foxconn’s initial involvement and subsequent actions with Lordstown Motors?

Foxconn bought Lordstown’s Ohio plant in late 2021 and a year later agreed to invest another $170 million through the purchase of common shares and newly created preferred shares. However, in April, they threatened to terminate their agreement with Lordstown, alleging a breach of contract due to the decline of Lordstown’s stock price.

More about Lordstown Motors Bankruptcy

You may also like


GreenDrive June 27, 2023 - 5:49 pm

Still rooting for the EV revolution, but we definitely don’t need more stories like this. Let’s hope future startups learn from Lordstown’s mistakes.

EV_Fanatic99 June 27, 2023 - 11:08 pm

Well, thts a blow to the EV industry. Startups need to have a solid plan and proper execution. Lordstown seemed to have neither.

OhioMan22 June 28, 2023 - 1:17 am

I live near the factory, lot of ppl gonna lose jobs 🙁 Its not just abt the company, it’s about the workers too!

InvestSmart June 28, 2023 - 2:18 am

This why u never invest in unproven companies. They lure u in with big promises but can they deliver? Obviously not in this case!

JakeTheCarGuy June 28, 2023 - 9:15 am

Wow, Lordstown really hit the skids, huh? They promised us the moon, but couldn’t even reach the roof. Shame, their trucks looked promising…


Leave a Comment