The electric vehicle (EV) startup, Lordstown Motors, which famously bought General Motors' redundant factory in Lordstown, Ohio, has taken a significant hit, following its recent filing for bankruptcy protection. The company is now shifting focus to potentially selling the design for its EV pickup truck, the Endurance. Despite major setbacks including battery fires, quality issues, and recalls - all occurring before full-scale production - Lordstown Motors hopes the truck's design could be an attractive proposition for manufacturers interested in an already designed electric pickup.
However, the value of the Endurance is highly questionable. While it touted a unique design with motors in each wheel, this has seemingly added more to the production costs than to the potential market price. The competition, in the form of Ford's F-150 Lightning and Rivian's debut pickup truck, is also mounting. All these issues have made Lordstown Motors a risky proposition for investors since its public listing in 2020 via a special-purpose acquisition company merger.
Despite Lordstown Motors' downfall, the town of Lordstown's status as an EV hub is not likely to change. The company's largest shareholder, Taiwanese industrial giant Foxconn, took over the former GM plant, allowing Lordstown to raise cash. With the factory and its staff under Foxconn's control, Lordstown Motors' failure might not significantly affect the town itself. Foxconn already has another project lined up with successful EV startup, Fisker, for manufacturing its Pear model at the Lordstown plant in 2025.
Finally, Lordstown Motors has instigated legal action against Foxconn, claiming a breach of contract. This arises after Foxconn withheld a portion of promised investment due to Lordstown's stock falling below $1 - a Nasdaq-set minimum level. Although Lordstown remedied this by performing a reverse stock split, the move did not repair the companies' relationship. As a result, Lordstown Motors' future now rests in the hands of lawyers and bankers, even as the town of Lordstown's EV business retains potential for growth.
