The Delaware-based maker of the Endurance EV pickup says investor Foxconn has a “pattern of bad faith.”
Lordstown Motors, the EV startup that developed the Endurance all-electric pickup, plans to take legal action against investor Foxconn to ensure that the Taiwanese firm completes its planned purchase of nearly 10 percent of the EV maker’s shares, according to Reuters.
Currently, Foxconn holds a little over 8 percent of the company, as shown by Refinitiv data shared by Reuters, and has invested $52.7 million, but the Taiwanese investor seems reluctant to purchase additional shares, citing a breach of their agreement.
Lordstown said in a court filing it believed Foxconn was unlikely to complete the promised purchase, citing a letter the contract manufacturer sent earlier this month, in which the Taiwanese electronics company did not acknowledge the subsequent common closing.
“The company believes that Foxconn’s various breaches of the investment agreement and pattern of bad faith have caused material and irreparable harm to the company,” Lordstown added in the filing.
Last month, the Delaware-based EV startup wrote in its latest 10-Q form filled with the Securities and Exchange Commission (SEC) that it has “substantial doubt” regarding its ability to continue developing the Endurance pickup in the context of Foxconn backing out, deteriorating market conditions, and losses piling up.
Bankruptcy was even put on the table as a worst-case scenario:
“If we are unable to resolve our dispute with Foxconn in a timely manner on terms that allow us to continue operating as planned, identify other sources of substantial funding, identify a strategic partner, and resolve our significant contingent liabilities, we may need to further curtail or cease operations and seek protection by filing a voluntary petition for relief under the United States Bankruptcy Code.”
Gallery: 2023 Lordstown Endurance
This is just one of the difficulties Lordstown Motors has gone through this year. Late last month, the EPA range rating of the Endurance was published and it revealed a less-than-ideal driving range of just 174 miles (280 kilometers) courtesy of a 109-kilowatt-hour battery pack, much lower than the expected 250 miles (402 km).
As a result, the 2023 Lordstown Endurance has the lowest efficiency of all the electric pickups on sale today in the United States, at just 48 MPGe, compared to the 68 MPGe of the Ford F-150 Lightning and the 73 MPGe of the Rivian R1T.
According to Lordstown Motors, just 31 Endurance pickups were assembled and made ready for sale as of February 2023, and just six units were delivered.
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Source: Reuters
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Keyword: Lordstown Motors Considering Suing Foxconn Over Funding Issues