TAIPEI (Taiwan News) — U.S.-based Lordstown Motors (Lordstown), an electric vehicle (EV) start-up specializing in trucks, applied for bankruptcy on Tuesday (June 27).
In addition to filing for bankruptcy, the company says it is also seeking a buyer, and is suing Foxconn, which it alleges failed to follow through on prior agreements to continue investments in the company, per UDN. Lordstown alleges Foxconn engaged in "fraud, bad faith, and repeated contractual breaches, which caused irreparable harm and value destruction to Lordstown."
In an interview with the BBC on June 20, Foxconn CEO and Chairman Young Liu (劉揚偉) said Foxconn is trying to "de-risk" its supply chain as U.S.-China relations deteriorate. Liu said the company was also making a big bet on EVs, hoping to capture 5% of the market by 2025.
Liu said EVs are the next major opportunity for his company. He said electric vehicles are more difficult to make as they contain about 20 times the components of an iPhone. However, the main control panel of an EV is like a large iPad, and the group is expert in camera modules, connectors, and even mobile cases.
However, less than two weeks after Liu's interview was aired, Lordstown's President, Edward Hightower, accused Foxconn of fraud, dishonesty, and breach of contract, causing major damage to Lordstown and its future business prospects.
Hightower said, "despite our best efforts and serious commitment to this partnership, Foxconn has repeatedly and willfully failed to execute on the agreed strategy, leaving us to treat Chapter 11 as the only viable solution. For the benefit of our stakeholders, we will choose to maximize the value of Lordstown's assets. We will aggressively pursue litigation against Foxconn accordingly."
Last year, Foxconn completed an OEM manufacturing agreement and a joint venture development agreement with Lordstown, officially acquiring the existing production equipment and factory in Lordstown, Ohio, USA.
Hightower believed Foxconn would provide support for its truck production and otherwise help develop the electric vehicle ecosystem. However, Hightower says this never happened and that Foxconn never had any intention of fulfilling its commitments, especially for the development of new car platforms.