What Does the Downfall of Lordstown Motors Mean for the EV Industry?

It was just two short years ago that several pickup trucks promised to rock the electric vehicle (EV) world. 

Lordstown Endurance. Image used courtesy of Lordstown Motors

EV start-up Rivian was first out of the gate when it introduced its RT1 in the Fall of 2021. The Ford F-150 Lightning was next in the Spring of 2022, and General Motors began producing its Hummer later that same year. While Chevrolet will introduce an all-electric version of the Silverado this year, Tesla has promised its often-delayed Cybertruck will appear before year’s end, and Stellantis has an electric pickup in the works, there are some start-ups whose EV journey has reached or is reaching the end. Companies like Bollinger, Canoo, and Nikola are all but gone from the EV pickup truck market, while Rivian appears to have trouble meeting its announced production numbers. 

Then there’s Lordstown Motors. 

Lordstown Motors was founded in 2018 and took over the old GM factory in Lordstown, Ohio, in 2020 as the home for the all-electric Endurance pickup truck. The Endurance was designed with four in-wheel electric hub motors to produce 600 horsepower, providing a 7,500-pound towing capacity, while the range from the 109-kilowatt-hour battery was estimated to be around 200 miles. A bright future seemed possible when the company formed a reverse merger with a special-purpose acquisition company and was listed on the NASDAQ stock exchange. 

Lordstown Motors: The Beginning of the End

Lordstown started to unravel when a Security and Exchange Commission (SEC) investigation into the company finances resulted in the resignation of both the CEO and the CFO in June of 2021. The company was also accused of overstating the number of orders for the Endurance pickup that it had on hand. In October 2021, Lordstown announced the sale of its former GM plant to the Taiwanese company Foxconn Technology Group (Hon Hai Technology Group) for $230 million. 

Lordstown started to unravel when a Security and Exchange Commission (SEC) investigation into the company finances resulted in the resignation of both the CEO and the CFO in June of 2021. The company was also accused of overstating the number of orders for the Endurance pickup that it had on hand.

Foxconn is well-known as an assembler of Apple iPhones, and part of the announcement was that Foxconn would assemble the Endurance pickup truck under a contract with Lordstown Motors, in which the company would also invest $50 million to purchase Lordstown common stock. In 2022, after the deal for the plant was finalized, Foxconn announced it would use the facility as a production hub for the Fisker PEAR electric vehicle. 

Lordstown Motors: The End of the End

In June 2023, the wheels came off Lordstown Motors as the company filed for Chapter 11 bankruptcy and filed litigation against Foxconn for its “fraud and willful and consistent failure to live up to its commercial and financial commitments to the Company.” Shares of Lordstown crashed 35 percent in trading.

In June 2023, the wheels came off Lordstown Motors as the company filed for Chapter 11 bankruptcy. Shares of Lordstown crashed 35 percent in trading.

Lordstown’s complaint accuses Foxconn of breaking its promise to invest up to an additional $170 million in the EV pickup truck company. Foxconn claims Lordstown misled the electronics manufacturer about its vehicle development, and Lordstown had breached the investment agreement because its stock fell below $1 per share. The Taiwanese company claims it was conducting constructive negotiations with Lordstown, but, ultimately, the dispute between the two companies could not be resolved.

Next Steps for Lordstown and the Industry

Lordstown is seeking a buyer for the Endurance vehicle design and related assets. In theory, an existing legacy automaker could purchase the Endurance design and springboard an EV pickup truck into production in a relatively short time. Unfortunately, Foxconn now owns the production facility in Lordstown, Ohio, so it is uncertain where such a vehicle might be built. Only a handful of Endurance pickup trucks were built in the past year. Currently, no buyers for the Endurance EV have been announced.

Lordstown seeks a buyer for the Endurance vehicle design and related assets. Currently, no buyers for the Endurance EV have been announced. 

It turns out that building EVs is a lot more difficult than it seems. Tesla had an early head start and spent more than a decade without any real competitors and is only now reaching a point where their survival is ensured. 

Now that legacy manufacturers like Ford, GM, and Stellantis, along with European and Japanese carmakers, the chances for a startup like Lordstown to become successful look less and less likely. 

Even companies like Rivian and luxury EV carmaker Lucid, which have overcome the initial hurdles and made it into production, find it’s a tough business to make any money. 

As romantic as the image of the small, tough competitor going against the establishment might be, the reality is that the EV’s future will largely belong to the established players.