Lordstown has reportedly lost about 85% of its value since 2021.
In early May, a serious question cropped up about the fledgling, Ohio-based Lordstown Motors: Will it even survive? The company struggled for years to develop and launch its electric Endurance pickup truck, culminating in its filing for Chapter 11 bankruptcy protection this week.
Lordstown spent years promising a market-defying electric truck that would compete against the likes of Ford, General Motors and Rivian. However, founder/CEO Steve Burns and CFO Julio Rodriguez resigned in 2021, after a prototype vehicle caught fire during its first test drive. The fire came to light from a police report obtained by Hindenburg Research, the firm that also brought Nikola to its knees. According to Hindenburg, company executives sold nearly $9 million in stock before news of the fire became public knowledge — and that was only one facet of Lordstown’s ongoing troubles.
In March 2022, General Motors dropped the small stake it had in the firm, while Lordstown Motors eventually went on to forge a deal with Taiwanese electronics giant Foxconn to financially support its venture and take on actually building the Endurance. As recently as May, though, it looked like Foxconn had enough of supporting Lordstown and said it would stop negotiations, due to development issues and Lordstown’s dubious claims to investors on its performance and how quickly it would ramp up Endurance production.
For the few trucks that did make it out to customers, Lordstown almost immediately had to recall every truck it built to sort an electrical issue.
What happens now?
In addition to the bankruptcy filing, Lordstown is also suing Foxconn for breach of contract in puling its financial support from the outfit. According to Lordstown’s latest statement, their litigation “details Foxconn’s fraud and willful and consistent failure to live up to its commercial and financial commitments to the company.” The suit claims that, rather than support a strategic venture, Foxconn entered into the agreement to act in bad faith and maliciously destroy Lordstown’s business.
While we will have to wait to see how that litigation plays out, Lordstown Motors in its present form is all but finished. Once valued at $5 billion in 2021, analysts’ estimates currently peg the struggling EV maker at around $30 million. Whether the company will emerge from bankruptcy protection and start again with new investment or will simply be bought out remains to be seen.
We’ll make sure to post an update whenever more information on Lordstown’s fate comes to light.
Not that it likely matters at this point given the circumstances, but here was our last opportunity to check out the Endurance and speak with CEO Edward Hightower:
