The bumbling management of electric vehicle (EV) company Lordstown Motors bumbled one last time. The failed company filed for Chapter 11 and accused China’s Foxconn of failing to provide promised financing. The money would not have mattered. Lordstown fell apart a year ago. (These are the 13 biggest electric vehicle business failures in American history.)
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Lordstown was supposed to get $170 million from Foxconn. Foxconn already had invested $52 million and owned a stake in the electric truck maker of just over 8%. That investment is probably worth zero today.
Lordstown was a $50 stock 11 months ago. It dropped below $3 recently. The Chapter 11 announcement pushed it closer to $1.50. A few unstable investors think the company will milk something out of Foxconn. It is a long shot, and these people will lose their money.
In February, Lordstown had a major recall and said its trucks had quality problems. This blow was followed by its quarterly earnings announcement. The company had revenue of $194,000 and lost $102 million. It lost $81 million in the same quarter the year before.
Ironically, Lordstown’s Endurance truck was named the Truck of the Year. It was priced too high at $65,000. Drivers could buy the Ford F-150 Lightning for the same amount and, with that, the power of Ford’s dealerships, design, warranties and brand.
Lordstown has moved down the path that most small EV companies will. It needed to be bigger, needed too large an investment and had virtually no brand equity.
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