Lordstown Motors files for bankruptcy and sues Foxconn

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Lordstown Motors filed for bankruptcy protection Tuesday and announced a lawsuit against Foxconn, accusing its former partner of setting out to “destroy” its business.

The electric vehicle maker, which specializes in pick-up trucks, made a Chapter 11 filing in a Delaware court while simultaneously starting legal action against Foxconn.

In a statement, the company said it was left with no choice after a high-profile tie-up with Foxconn, the world’s biggest contract electronics manufacturer, fell apart.

It accused the Taiwanese tech firm of fraud and failing to follow through on promises to invest in the company.

“Despite our best efforts and earnest commitment to the partnership, Foxconn willfully and repeatedly failed to execute on the agreed-upon strategy, leaving us with Chapter 11 as the only viable option,” Lordstown CEO Edward Hightower said in the statement.

“We will vigorously pursue our litigation claims against Foxconn accordingly.”

Foxconn did not immediately respond to a request for comment.

Officially called Hon Hai Technology Group, Foxconn is best known for making iPhones for Apple

(AAPL), but has recently made moves toward building electric vehicles. In 2021, it purchased an Ohio factory that Lordstown Motors had itself bought from General Motors in 2019.

Foxconn also agreed to handle the manufacturing of Lordstown’s electric pick-ups at the site, and to make further investments provided certain milestones were met.

But the partnership appeared to break down earlier this year. In May, Lordstown disclosed that Foxconn said it wanted to back out of making further investments over claims that the automaker had not upheld its end of the agreement.

That impasse left the automaker on shaky financial ground. Lordstown warned last month that it could face bankruptcy.

— This is a developing story and will be updated.

Sumber: www.cnn.com

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