After starting small-batch production of the electric Endurance car last fall, Lordstown Motors has filed for Chapter 11 bankruptcy protection. Foxconn was making the Endurance at a plant in Ohio. Earlier this year, the company avoided a $170 million investment in Lordstown, putting the young electric car in danger. Lordstown is also suing Foxconn in the same case. Lordstown says that Foxconn broke the terms of the investment deal. The story of Lordstown might be coming to an end. The struggling car company has filed for bankruptcy under Chapter 11 and is selling its Endurance electric pickup and other assets. Lordstown Motors was founded in 2018. It started making a few cars in September 2022 but stopped in February 2023 because of quality problems. Just days before filing for bankruptcy, Lordstown Motors said there was “substantial doubt about our ability to continue as a going concern.” This sobering admission came after a Nasdaq warning in April that the company could be taken off the market. A few months before the notice was sent, the company’s stock price had dropped below $1 and had yet to go back up. Lordstown had broken its investment deal with Foxconn, a Taiwanese electronics company. In addition to putting $50 million into the EV company, Foxconn bought the original manufacturer’s plant in Lordstown, Ohio, in 2022. At the time, the Endurance was scheduled to be built at the plant. Foxconn had agreed to spend another $170 million in Lordstown in November 2022. Still, when the Nasdaq warned that Lordstown’s stock would be taken off the market, Foxconn put the deal on hold and threatened to cancel it if the problem with Lordstown’s inventory wasn’t fixed. Lordstown replied that Foxconn couldn’t get out of the contract because it was written that way and that the claims of a breach were false. Lordstown said today that it had sued Foxconn, or Hon Hai Technology Group as it is known in China and Taiwan, and filed for bankruptcy. With production stopped in February and 19 cars being called back, it needs to be clarified what will happen to the few Endurances that were made or if any are still in the hands of buyers. Even though a Chapter 11 bankruptcy is often used to restructure a business to keep it going, Lordstown’s plans to sell its Endurance truck assets make people wonder what will be left after the process. No matter what happens with Lordstown, the bankruptcy filing is a sobering warning that, despite the recent rise in electric vehicle (EV) companies, starting a car company from scratch and getting a vehicle on the market is demanding.
