US electric vehicle maker Lordstown sues Foxconn, files for bankruptcy after deal with the Apple supplier falls through

The start-up EV firm filed for Chapter 11 bankruptcy after a deal with Foxconn started to unravel in January as costs exceeded the target price for a new pickup

The Taiwanese manufacturer still owns the Ohio facility it bought from General Motors and is aiming to capture 5 per cent of the global EV market by 2025

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The Lordstown Motors factory is where GM once operated, in Lordstown, Ohio, seen on October 16, 2020. Photo: AFP

Published: 7:15pm, 28 Jun 2023

Lordstown 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 start-up to warn it could fail if it was unable to resolve the conflict.

Lordstown shares pared an early drop of as much as 59 per cent to trade down 17 per cent to US$2.29 in New York on Tuesday. The stock had traded at more than US$400 as recently as early 2021.

The troubled EV manufacturer also sued Foxconn on Tuesday for breach of contract. In its complaint, Lordstown alleged Foxconn consistently failed to honour its agreements and forced it into bankruptcy.

“After getting the valuable assets it desired upfront, it then sabotaged the Debtors’ business, starving it of cash and causing it to fail. Instead of building a thriving business for the benefit of all Lordstown’s stakeholders, Foxconn maliciously and in bad faith destroyed that business, costing Lordstown’s creditors and shareholders billions,” it wrote in the complaint.

Foxconn in a statement rejected Lordstown’s claims and said it “reserves the right to pursue legal actions and also suspends subsequent good faith negotiations”.