The Lordstown story may be coming to an end. The embattled automotive startup filed for Chapter 11 bankruptcy protection today and is offering its Endurance electric pickup and related assets for sale. Lordstown Motors was founded in 2018 and built a handful of trucks starting in September 2022 before pausing production to address quality issues in February.
The bankruptcy filing comes just a couple of months after Lordstown Motors admitted there was “substantial doubt regarding our ability to continue as a going concern,” an ominous forecast prompted by a delisting warning from the Nasdaq in April. That warning—issued because the company’s share price had closed below $1 a couple of months earlier and had failed to recover—put Lordstown in apparent breach of its investment agreement with Taiwanese electronics company Foxconn.
Foxconn had purchased the Lordstown, Ohio, factory from the eponymous automaker in 2022, invested $50 million into the EV startup, and was building the Endurance under contract. Foxconn had agreed to another investment of $170 million in November 2022, but the delisting warning from the Nasdaq caused Foxconn to hesitate, threatening to back out of the agreement if Lordstown didn’t settle its stock listing situation.
Lordstown countered that the terms of the contract didn’t allow Foxconn to exit the deal and that the claims of a breach in the agreement were unfounded. Along with filing for bankruptcy, Lordstown also announced today that it was filing a lawsuit against Hon Hai Technology Group, as Foxconn is known in China and Taiwan. The lawsuit focuses on “Foxconn’s fraud and willful and consistent failure to live up to its commercial and financial commitments to the company,” according to Lordstown. The startup claims that “Foxconn’s actions led to material damage to the Company as well as its future prospects.”
Lordstown Motors
Its unclear what will happen to the few Endurances that were produced, and whether any are still in the hands of customers, with the February production pause also including a recall of 19 vehicles. Although Chapter 11 bankruptcy is usually structured as a reorganization that aims to keep the business alive, Lordstown’s plans to sell its Endurance truck assets leave the question of what will be left by the end of the process.
Regardless if Lordstown comes out the other side intact, the bankruptcy filing serves as a stark reminder that, despite the boom of EV startups in recent years, it is incredibly hard to create an automaker from scratch and bring a car to market.
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From: Car and Driver
Caleb MillerAssociate News Editor
Caleb Miller began blogging about cars at 13 years old, and he realized his dream of writing for a car magazine after graduating from Carnegie Mellon University and joining the Car and Driver team. He loves quirky and obscure autos, aiming to one day own something bizarre like a Nissan S-Cargo, and is an avid motorsports fan.
Keyword: Lordstown Files for Bankruptcy, Endurance Pickup Assets up for Sale