EV startup Lordstown Motors files for bankruptcy
Lordstown Motors, a U.S.-based electric vehicle startup that launched with huge fanfare and financial backing five years ago, has filed for bankruptcy.
In a statement on Tuesday, the company said it filed for Chapter 11 protection in a Delaware bankruptcy court in an attempt to find a potential buyer, and said it remained confident that a future owner could take its Endurance truck and “multiple EV variants and take the product to the next level.”
Lordstown blamed its financial situation on Taiwanese tech giant Foxconn, which wavered on a $170 million earlier this year. And it filed a lawsuit against the company, called Hon Hai Precision Industry in Taiwan and China, for allegedly destroying its business.
“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,” Lordstown CEO Edward Hightower said in a statement.
“We will vigorously pursue our litigation claims against Foxconn accordingly.”
The automaker also filed a series of customary “first day” motions to continue operating the business during the process, which it said it expected to have approved quickly.
Lordstown is named after the Ohio town where it is based, and where its Endurance truck model is manufactured at a former General Motors factory.
“We remain confident that an orderly, expedited sale process will maximize value for our stakeholders and enable the talent and technology behind the Endurance to find new and supportive ownership,” Hightower said in the statement. “While in Chapter 11, Lordstown will continue to support our customers.”
Lordstown in its lawsuit accused Foxconn of leveraging resources gained through the partnership to advance its own business interests.
The Hill has reached out to Foxconn for comment. In a statement, the company told Reuters on Tuesday that it had maintained a positive relationship in negotiations with Lordstown, saying that the U.S. company was reluctant to carry out the terms of its investment agreement. It also said it was reserving the right to pursue its own legal action.
Lordstown’s bankruptcy filing marks the latest hit for EV startups as Tesla and traditional auto industry giants have ramped up competition in the space.
Source: The Hill
