Lordstown Motors – the EV startup that bought the GM Lordstown plant in Ohio back in 2019 – has filed for Chapter 11 protection following a dispute with Taiwanese electronics manufacturer Foxconn.
According to a report from Reuters, the electric vehicle manufacturer has filed a complaint in bankruptcy court alleging that Foxconn conducted in a fraudulent manner, and made a series of false promises related to the previous arrangement of investments into Lordstown.
A Lordstown Motors spokesperson alleged that Foxconn engaged in a “pattern of bad faith” that caused “material and irreparable harm.”
It’s worth noting that the EV startup warned back in May 2022 that it may be forced to file for bankruptcy over uncertainly with the Foxconn investment. For its part, the Taiwanese electronics manufacturer has claimed that Lordstown breached the contract when the automaker’s stock price fell below $1 per share.
In the new lawsuit, Lordstown Motors is attempting to paint Foxconn as an inconsistent partner, with constantly shifting goals during collaboration with the automaker’s future vehicles, including failing to meet funding commitments and refusing to engage with Lordstown on initiatives the electronics manufacturer allegedly directed and signaled to support.
For reference, Foxconn previously invested roughly $52 million into Lordstown as part of the aforementioned agreement, and currently holds an ownership stake of approximately eight percent.
As a reminder, Lordstown Motors has been through a rollercoaster ride of ups and downs over the past several years. As previously mentioned, the EV startup purchased the GM Lordstown plant after General Motors ceased production of the Chevy Cruze. For selling the plant at a discounted rate, The General received roughly eight million shares of Lordstown.
Following a short-seller report in early 2021, General Motors sold its stake in the EV startup, with cofounder and CEO Steve Burns ultimately resigning. Afterwards, Lordstown Motors began acquisition talks with Foxconn, who eventually ended up purchasing the Lordstown plant for $230 million, while an additional $50 million investment in the electric vehicle manufacturer. The acquisition was completed in May 2022.