EV maker Lordstown Motors Corp (NASDAQ:RIDE) on Tuesday filed for bankruptcy protection following a drawn-out dispute with Foxconn over a $170 million investment.
What Happened: The company said that it has started the sales process for its Endurance truck and other related assets and has filed litigation against Hon Hai Precision Industry Co Ltd and its affiliate Foxconn Ventures Pte Ltd.
Foxconn failed to live up to its financial commitments to the company, thereby damaging the company and its future prospects, the EV maker said.
“Despite our best efforts and earnest commitment to the partnership, Foxconn willfully and repeatedly failed to execute the agreed-upon strategy, leaving us with Chapter 11 as the only viable option to maximize the value of Lordstown’s assets for the benefit of our stakeholders,” CEO Edward Hightower said. The CEO added that the company will pursue its litigation claims against Foxconn “vigorously.”
Why It Matters: Lordstown received a notice from Foxconn on April 21 seeking to withdraw from the investment agreement citing a breach of conditions, following which the companies engaged in discussions for a resolution.
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