Doubts grow for EV production in former GM plant
Lordstown Motors has officially filed for bankruptcy and hopes to find a new prospect for all of its assets.
This includes the all-electric Endurance pick-up truck, an EV that was the first of its kind and touted all the way from Washington D.C. when plans were first announced in 2019.
Fast forward to now, and LMC is not only going bankrupt but also suing the partner and Tawiannise parent company that finalized a purchase of the former GM plant last year, Foxconn.
LMC said Foxconn caused irreparable harm to the to the company and alleges that “Foxconn had no intention of living up to its commitments, particularly with respect to the new vehicle development platform.”
"What we are seeing overall is the EV start-ups are really struggling financially to get vehicles into the market and make start making money," Michelle Krebs, Executive auto Analyst of Cox Automotive said, "It's all about who can fund this, and they're not alone in looking for funding and the market has gotten way more competitive."
In order for this plant to produce electric vehicles, Krebs predicts the money and desire to invest aggressively needs to be there.
Although Foxconn has the money, Krebs points out that the company's track record for investing in Electric Vehicles isn't promising. On top of that, she said while Lordstown Motors was struggling to start up, major automakers were making aggressive EV investments of their own during that time, so it may be unlikely that big car makers are going to invest.
"When you look at the traditional automakers, they've laid out their plans," she said, "They've laid out their investments. The only one I could possibly see is maybe a foreign automaker that we're not thinking of that could come in, but Foxconn's a foreign company too and that didn't work out so well."
Foxconn provided 21 News a statement response to the lawsuit and LMC filing for bankruptcy. Foxconn said in part, "Foxconn originally hoped to continue discussions and reach a solution that could satisfy all stakeholders, without resorting to baseless legal actions, but so far the two parties have yet to reach a consensus. Regarding LMC's litigation announcement today and the false comments and malicious attacks made by LMC in its external statements against Foxconn, the Company reserves the right to pursue legal actions and also suspends subsequent good faith negotiations."
Krebs said no one knows for sure what will happen to the former GM plant in Lordstown or whether Foxconn's plans will prevail, but has seen the situation end a bit differently for other plants.
"A lot of plants have just been torn down," she said, "GM closed a lot of plants, and I can point to a number of them that had just been torn down and the property re-developed in some way."