Electric Truck Startup Lordstown Motors Corporation Files For Bankruptcy

Lordstown Motors Corp., an electric truck startup based in Ohio, has filed for Chapter 11 bankruptcy protection and is up for sale after failing to resolve a dispute with Taiwan’s Foxconn over a promised investment. The company accuses Foxconn of fraudulent conduct and broken promises related to a $170 million investment agreement. Lordstown claims that Foxconn misled them about collaboration on vehicle development plans and is refusing to purchase additional shares as agreed. Foxconn, on the other hand, states that Lordstown breached the investment agreement. The clash between the two companies could have implications for Foxconn’s EV ambitions and partnerships with other automakers.

Lordstown’s bankruptcy filing sets the stage for a potential international business clash that may impact Foxconn’s EV plans. The startup halted production of its Endurance electric truck earlier this year but resumed at a low rate after resolving quality issues. The company’s shares have experienced a significant decline since February. Lordstown is now seeking a buyer to potentially restart full production of the Endurance. If unsuccessful, the Ohio factory owned by Foxconn could attract overseas automakers looking for a quick entry into the U.S. market.

They were one of the first out there to give a “truck”- which is based off of a Chevrolet 1500. It was unique- independent wheel motors inside the wheel, versus everyone else who puts a motor in the middle of the vehicle and still uses conventional CV axles to propel the wheel hub. The former GM small-car factory was sold to Lordstown Motors in 2018, with the support of former President Donald Trump and Ohio political leaders. Lordstown Motors went public in 2020 through a reverse merger.

LM made an offroad race truck in 2021. They tried, but didn’t do well. The idea was awesome- Just like other manufacturers like Ford, who took their nearly stock Raptor through the Baja 1000. LM tried to do this with the San Felipe 250….. and only made it 40 miles. This was a good example of what a fully loaded down truck, with crew, pulling a loaded down trailer real world results would start to show. These “work trucks” aren’t and weren’t designed for real world scenarios. The performance of it is amazingly low, as well compared to other EV trucks, like the Ford Lightning.

Back in 2021, the CEO and founder, Stephen Burns, decided to step down from his role at the company. This move came after LM admitted to exaggerating their pre-order numbers. Facing competition from well-established automakers, Lordstown encountered several challenges in meeting the expectations of investors. As a result, they witnessed a series of replacements within their leadership team. The company has been grappling with issues surrounding production scaling, market dynamics, and the significant expenses associated with their operations. Unfortunately, their truck production has been quite limited, with only around 40 trucks manufactured so far. It seems unlikely that I’ll be able to recover my $100 deposit, which is quite disappointing.

Alex Noll

CEO – ABR Houston

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