Professor Elam

Thursday May 4 2023

In January 2021, its pickup prototype burned during testing. As it burned through cash, Lordstown sold its namesake plant and contracted assembly to Foxconn Technology Group. Last November Foxconn agreed to invest $170 million in Lordstown, perhaps hoping that Inflation Reduction Act subsidies would provide a boost.

Yet Lordstown had manufactured only 31 vehicles by late February 2023—most of which had to be recalled. Losing patience, Foxconn on April 21 threatened to withdraw its investment, triggering Lordstown’s bankruptcy warning.

As interest rates have normalized, companies with little revenue are struggling to borrow and raise fresh capital. This is one reason stocks of other EV startups have crashed from their pandemic highs, including Canoo (down 96%), Nikola (99%), Faraday Future Intelligent Electric (99%), Rivian (90%), Lucid (87%) and Fisker (81%).