Lordstown Motors Corporation has collapsed.
On Tuesday, the electric truck startup filed for bankruptcy protection and listed for sale. The move comes after the automaker revealed its Taiwanese partner, Foxconn, is looking to withdraw from the necessary funding agreement.
Lordstown said it was looking to sell the Endurance electric truck and related properties to good faith buyers.
The automaker then filed a complaint and sued Foxconn for fraud, dishonesty, and multiple breaches of contract, all of which the company says has damaged its value.
Lordstown said a letter from Foxconn it received in April warned the truck maker that there had been a breach of contract in the funding agreement because its stock had fallen below $1 a share. for 30 consecutive days. That is what triggered the delisting notice from NASDAQ.
Foxconn, a Taiwanese contract manufacturer, bought Lordstown’s factory in 2022 for $230 million. In the latter’s second deal, Foxconn agreed to invest up to $170 million in Lordstown, which CNBC calculated was a 19.3% stake in the American company.
Foxconn reportedly paid only the first $52.7 million of the second deal. The $47.3 million supplement due in May failed to arrive.
Best known as a contract manufacturer for Apple’s iPhones, Foxconn has turned to EV production. The company also signed a construction contract pear.
March, Lordstown pauses production of Endurance because recall. The problem affects 19 vehicles that have been delivered to customers.
Initial sales targets for Endurance were 50 units by 2022 and 500 units by 2023, but as of March, only 6 units have been sold this year with around 40 trucks completed or in progress. assemble.
