Lordstown Motors has filed for bankruptcy protection and is now up for sale.
The company's financial troubles stem from a disagreement with Taiwanese company Foxconn over a promised investment.
Lordstown accuses Foxconn of fraudulent behavior and failing to fulfill its commitment to invest up to $170 million in the electric vehicle manufacturer.
Foxconn had previously invested around $52.7 million in Lordstown and currently holds an 8.4% stake in the company.
Foxconn Claims Lordstown Breached Agreement
Lordstown alleges that Foxconn has been unwilling to purchase additional shares as agreed and has misled them regarding collaborative vehicle development plans.
Foxconn claims that Lordstown breached the investment agreement when the automaker's stock price fell below $1 per share. The Taiwanese company has suspended negotiations with Lordstown and is considering legal action.
Banking on the Future of EVs
This clash between Lordstown and Foxconn raises questions about Foxconn's electric vehicle ambitions and partnerships, not just with Lordstown but also with other automakers. Lordstown's main product is the Endurance electric pickup truck, manufactured at a former General Motors factory in Ohio.
Lordstown's bankruptcy filing aims to find a buyer, but no initial offer has been secured yet. The company's CEO believes that the Endurance business could appeal to another automaker seeking a quick entry into the EV market, especially as the Biden administration pushes for a transition from gasoline-powered vehicles.