Lordstown Motors Files For Bankruptcy, Prepares For Legal Fight With Foxconn Over Prior Deal

When we last saw Lordstown Motors, we had a chance to get a glimpse of the Endurance pickup truck when the model embarked on a surprising underdog bid for NACTOY truck of the year honors. While that bid ultimately came up short, we liked the truck that they had on display at the event. However, Lordstown has also been on a figurative rollercoaster financially, and the company has revealed that it has formally filed for bankruptcy as the company prepares to sue Taiwanese tech giant Foxconn.


Bankruptcy Latest Chapter In Lordstown Saga

Lordstown’s move to Chapter 11 bankruptcy is an attempt by the company to get protection from creditors and is the latest fallout of a long-running dispute between Lordstown and Foxconn Technology Group over the manufacturing of Endurance pickups in Ohio. Foxconn claims that Lordstown failed to live up to its commitments despite their best efforts at helping them, while Lordstown reps point the finger at Foxconn for pulling out of the deal and not following through on their own commitments as part of that aforementioned $170 million deal that also gave the Taiwanese company two board seats on the company’s board of directors.

The back and forth between the two companies has caused Lordstown’s stock to crater, with the company’s shares currently going for $2.12 per share as of this writing. That’s certainly a far cry from several years ago when the stock sold for $400 a share. Lordstown has also had to fight off several other crises during its tumultuous existence, including a probe by the Securities and Exchange Commission (SEC) into inflated vehicle orders as well as weathering the storm created by claims from several short-selling firms. The Endurance pickup itself has also received scrutiny, with the development of the truck revealing not only numerous teething problems but also a case where a prototype actually caught fire. The Endurance has just now entered production, but the small handful of trucks the company has made is far from the original target figure that Lordstown revealed several years ago.


What’s Next For The Company?

For now, the future is uncertain and will largely depend on how legal proceedings between the company and Foxconn play out. However, Foxconn will undoubtedly have the legal high ground since the company still owns the Lordstown manufacturing plant, and the loss of Lordstown, (the company) as a potential customer will not impact its plans too much since it already has a separate deal inked with rival firm Fisker to build the PEAR EV at the facility. Foxconn is also committed to its goal of having at least 5% of the EV market by 2025 and the PEAR and other potential deals would play a big role in the firm reaching this goal.