Ohio-based electric pickup truck start-up Lordstown Motors has filed for Chapter 11 bankruptcy protection and filed a lawsuit against Foxconn to resolve a dispute over promised investment, Kallanish reports.

Lordstown Motors also put itself up for sale including its Endurance all-electric pickup truck and related assets as part of its strategic restructuring process. The company plans to continue operating under the Chapter 11 protection with the intent to maximise value of its assets.

In a complaint submitted to a bankruptcy court in the state of Delaware, the start-up accused Foxconn of fraudulent conduct and a series of broken promises in failing to provide $170 million as pledged under an earlier agreement.

Foxconn said in a statement that Lordstown Motors had failed to comply with terms of that agreement. It says it was suspending negotiations with Lordstown Motors and reserved the right to sue the US company.

“Despite our best efforts and earnest commitment to the partnership, Foxconn wilfully and repeatedly failed to execute on the agreed-upon strategy, leaving us with Chapter 11 as the only viable option to maximise the value of Lordstown’s assets for the benefit of our stakeholders,” says Lordstown president and ceo Edward Hightower. “We will vigorously pursue our litigation claims against Foxconn accordingly.”

Last November, the Taiwan-based iPhone maker Foxconn and Lordstown signed a production partnership deal with Foxconn acquiring a 20% stake for up to $170 million. It has invested $52.7 million and is reportedly opposed to investing more, citing a breach of their agreement in a 21 April 2023 letter to the Ohio company. Foxconn says shares of Lordstown Motors have dropped below $1/share for 30 consecutive trading days in violation of that agreement. The remaining $117.3m investment appears to be in doubt.

The car manufacturing plant is housed in a giant factory in Lordstown, Ohio, that General Motors closed in 2019.