Lordstown Motors files for bankruptcy and sues Foxconn
Motors Corp. shares plummeted after the electric-vehicle maker once hailed by former US President Donald Trump for saving automaking jobs filed for bankruptcy.
The move to seek Chapter 11 protection from creditors follows a protracted dispute with iPhone maker Foxconn Technology Group over a deal to make pickup trucks for Lordstown at an assembly plant in Ohio. The Taiwanese manufacturer had said it was prepared to pull out of their production partnership, prompting the EV startup to warn it could fail if it was unable to resolve the conflict.
Lordstown shares declined as much as 67% in US premarket trading after closing Monday at $2.77, valuing the company at just $44 million. The stock traded at more than $400 as recently as early 2021. The company’s demise caps several torrid years for EV startups that reached sky-high valuations following reverse mergers, only to fall victim to brutal corrections. In its filing, Lordstown listed as much as $500 million of both assets and liabilities. It doesn’t have any debt.
Foxconn agreed in November to invest as much as $170 million in Lordstown and take two board seats. The deal gave the EV maker much-needed capital while offering the Taiwanese manufacturer a firmer foothold in automotive production.
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