Lordstown Motors: The EV maker’s ruin is one of the shocks Spock will endure

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Lordstown Motors’ flagship truck is known for its Endurance, a spiritual status the electric vehicle maker has notably failed to achieve. On Tuesday, the US start-up filed for bankruptcy protection exactly four years after its inception and two years after its US listing through a “blank cheque” merger.

Since 2019, Lordstown has raised close to $1 billion in capital. It has built only 65 Endurance vehicles. Legal fees cost $60 million, or about $1 million per truck, according to court documents.

Those expenses keep on increasing. The company is suing partner Foxconn as part of the bankruptcy filing. Lordstown alleges that the Taiwanese contract manufacturer did not meet operational or financial commitments. Foxconn denies any wrongdoing.

In an age of optimism and cheap cash, Lordstown made an ambitious bet on a promising technology. When the going got tough, bringing in a capable partner seemed a smart bet.

Lordstown first took investment from Foxconn in 2021. The contract manufacturer later bought the start-up’s auto plant – previously owned by General Motors in Lordstown, Ohio – for $230mn as it became the backbone for its entry into auto production. At one point, tech investor SoftBank wanted to work with Foxconn on building an EV in Lordstown.

The US start-up alleges Foxconn deliberately went slow, then reneged on the agreed investment. The courts can decide whether it is true or false. But it’s not clear that even a few hundred million dollars more investment could have changed the game. Moonshot projects often take more time and cash than expected and still fall short.

Lordstown is one of several EV and auto tech companies funded with cash raised through special purpose acquisition companies. The business has only $136 million left to finance its bankruptcy. Intellectual property is in other hands.

The Spac phenomenon quickly brought many fledgling concepts to the public markets. The legal fallout will last longer than many companies.