Lordstown Motors Files For Bankruptcy, Sues Foxconn

US electric truck manufacturer Lordstown Motors filed for bankruptcy protection on Tuesday and put itself up for sale after failing to resolve a dispute over a promised investment from Taiwan's Foxconn.

Photo Insert: Lordstown contends Foxconn is balking at purchasing additional shares of its stock as promised and misled the EV maker about collaborating on vehicle development plans.

Shares of Lordstown tumbled 60% in pre-market trading, Mike Spector, Joseph White and Dietrich Knauth reported for Reuters.

"The bankruptcy of Lordstown signals that the days of successful EV startups is in the rearview mirror," said Thomas Hayes, chairman at hedge fund Great Hill Capital. "Moving forward it will be Tesla and the traditional incumbents ... that will duke it out for market share."

The automaker, named after the Ohio town where it is based, filed for Chapter 11 protection in Delaware and simultaneously took legal action against Foxconn.

In a complaint filed in bankruptcy court, Lordstown accused the electronics company of fraudulent conduct and a series of broken promises in failing to abide by an agreement to invest up to $170 million in the electric-vehicle manufacturer.

Foxconn previously invested about $52.7 million in Lordstown as part of the agreement, and currently holds an almost 8.4% stake in the EV maker. Lordstown contends Foxconn is balking at purchasing additional shares of its stock as promised and misled the EV maker about collaborating on vehicle development plans.

Foxconn, formally called Hon Hai Precision Industry and known for assembling Apple's iPhones, has said Lordstown breached the investment agreement when the automaker's stock fell below $1 per share.

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