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The Endurance, the flagship truck of Lordstown Motors, has become a symbol of failure for the electric vehicle maker. Recently, the US start-up filed for bankruptcy protection, just four years after its inception and two years after its US listing through a “blank cheque” merger.
Despite raising nearly $1 billion in capital since 2019, Lordstown has only managed to produce 65 Endurance vehicles. According to court documents, the company has spent $60 million on legal expenses, averaging about $1 million per truck.
These expenses are expected to increase as Lordstown is currently suing partner Foxconn, alleging that the Taiwanese contract manufacturer failed to meet operational and financial commitments. Foxconn denies these allegations.
In an era of optimism and easy money, Lordstown took a risk on a promising technology. When faced with challenges, bringing in a capable partner seemed like a wise move.
In 2021, Lordstown received an investment from Foxconn, who later purchased the start-up’s auto plant in Lordstown, Ohio, previously owned by General Motors, for $230 million. This acquisition served as a foundation for Foxconn’s entry into auto production. At one point, SoftBank expressed interest in collaborating with Foxconn to create an EV in Lordstown.
Lordstown asserts that Foxconn intentionally delayed and ultimately reneged on agreed investments. The courts will determine the truth of these claims. However, it is unclear whether even an additional couple hundred million dollars of investment could have altered the outcome. Moonshot projects often require more time and money than initially anticipated and still fall short.
Lordstown is just one of several EV and auto tech companies that have exhausted their funding raised through special purpose acquisition companies. The company now has only $136 million remaining to support its bankruptcy proceedings, while the intellectual property is in the hands of others.
The premature introduction of many immature concepts to the public market through the Spac phenomena will result in ongoing legal implications.
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