Lordstown Waves Red Flag Over Potential Souring of Foxconn Deal

Chris Teague
by Chris Teague

Lordstown Motors is back in the headlines with news that it could end up in bankruptcy if it can’t negotiate a dispute with Foxconn. The Taiwanese giant threatened to withhold funding, which could have a dire impact on Lordstown’s ability to operate.

Lordstown’s securities filing noted that if the company is “unable to resolve our dispute with Foxconn in a timely manner on terms that allow us to continue operating as planned, identify other sources of funding, identify a strategic partner and resolve our significant contingent liabilities, we may need to curtail or cease operations and seek protection by filing a voluntary petition for relief under the bankruptcy code.”

Foxconn planned to invest up to $170 million in Lordstown and had purchased its home factory in Lordstown, Ohio, for $230 million, but the automaker’s struggles with volume production and cost controls have soured the relationship. Foxconn notified the automaker that the agreement could be terminated within 30 days, citing a breach in the agreement. 

For Lordstown, it’s just the latest in a string of setbacks, dating back more than a year to the pandemic and supply chain-related product delays. More recently, the company had to recall all of its trucks for an issue with the electronic parking brake. The company has been building trucks, just much more slowly than expected, and it has struggled to lower its costs to hit the targeted $65,000 sales price. 

[Image: Lordstown]

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Chris Teague
Chris Teague

Chris grew up in, under, and around cars, but took the long way around to becoming an automotive writer. After a career in technology consulting and a trip through business school, Chris began writing about the automotive industry as a way to reconnect with his passion and get behind the wheel of a new car every week. He focuses on taking complex industry stories and making them digestible by any reader. Just don’t expect him to stay away from high-mileage Porsches.

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9 of 25 comments
  • RHD RHD on May 02, 2023

    There is an opportunity for one of the bigger companies to acquire this company and add its assets to their portfolio.

    Or Shell/Exxon/Chevron might buy it just to close it down. Corporations (beer conglomerates, for example) do this kind of thing all the time.

    • SCE to AUX SCE to AUX on May 03, 2023

      They have virtually no assets, and nobody would bother buying them.

  • VoGhost VoGhost on May 02, 2023

    Voters in industrial northeast Ohio have not forgotten a particular promise President Donald Trump made when he visited the region soon after taking office. Manufacturing jobs are “all coming back,” Trump said. “Don’t move. Don’t sell your house.”

    • See 2 previous
    • VoGhost VoGhost on May 04, 2023

      To be clear - I didn't report your comment, and have gotten quite used to the slings and arrows of outrageous commenters here. I just wish more commenters would hold themselves accountable to facts and science.

  • Akear Akear on May 03, 2023

    No need for a death watch here. The company is basically dead. Lucid is next. Musk was right about Lordstowns and Lucid.

    • CoastieLenn CoastieLenn on May 03, 2023

      I hope Lucid turns it around, they have an attractive (if slightly too expensive) product. Lordstown though, they haven't made anything that doesn't look like either a Chinese market knockoff product or a "build it yourself" kit vehicle.

  • Art Vandelay Art Vandelay on May 03, 2023

    These are $#!+