American EV maker Lordstown Motors has filed for bankruptcy. The company blames its demise on Foxconn, which allegedly reneged on an agreement to invest up to $170 million in the carmaker. For that reason, Lordstown is now suing Foxconn.
Lordstown alleges that Foxconn has not fulfilled its investment promises and has not cooperated with Lordstown on initiatives that Foxconn claimed to support, writes Reuters. However, the Taiwanese chipmaker claims that the automaker actually violated the agreement because the company’s shares fell below $1 each in April. If shares fall below a dollar each for 30 days, Lordstown would be delisted from the Nasdaq stock exchange. Foxconn previously threatened that if that happened, it would terminate the investment agreement.
According to Lordstown, the problems started after Foxconn took over its car factory in Ohio last year for $230 million. Lordstown builds its electric pickup truck at this factory Endurance. Lordstown claims that Foxconn pretended to be interested in working together, but in reality only wanted to gain ownership of the factory. “Once Foxconn took over the factory and found a workforce, it defaulted on its obligations,” the company said in its complaint which TechCrunch quotes from.
In 2021, the collaboration between Lordstown and Foxconn began. The latter currently owns 8.4 percent of Lordstown’s shares, which is equivalent to approximately $52.7 million. The bankrupt company hopes to find a buyer. Foxconn told Reuters it reserves the right to take legal action itself.
Lordstown Endurance