Lordstown Motors, a new company that makes electric cars, filed for bankruptcy today. Since 2018, the publicly listed company has been trying to make an electric car called the Endurance. However, it has had trouble making cars and has yet to be able to get enough money to keep going. The automaker has delivered a small number of trucks to customers. Still, Foxconn, a Taiwanese technology company that had invested in it to keep it going, has chosen not to keep doing so. After filing for Chapter 11 bankruptcy, Lordstown plans to look for a buyer, and it is now suing Foxconn for allegedly breaking a contract. But if someone wanted to buy the company, it would be easy. The Wall Street Journal says that the value of Lordstown hit $5 billion in 2021. It is worth about $30 million on the market right now. The company has had money problems for a long time. In 2021, when an early concept car caught fire, the CEO and CFO of the company quit. A few months later, General Motors gave up its small share. Even though every car had been called back because of a problem with an electrical connection, some trucks still showed up. The link between Foxconn and Lordstown may have been in danger as early as May, but everything has fallen apart since then. Foxconn says that Lordstown broke their investor agreements and that the carmaker made “false comments and malicious attacks” on it. Because of this, there won’t be any more talks with the Ohio-based company. Buyers needed to determine which new electric cars would do well during the pandemic. Even great companies like Lucid and Rivian have money problems, and they would likely still be in business with hundreds of millions of dollars in funding from partners and investors. Many thought Lordstown, Faraday Future, and other companies would win the race. They are on their way to car limbo because they don’t have any new technology or manufacturing know-how. Nikola, a company that makes electric cars, could be a part of this group. People thought for a long time that the company would go out of business. It is still unclear whether the company can be brought back to life or will just be bought out for its assets.
