Lordstown’s Endurance EV pickup may be a pipe dream after all, as Foxconn deal falls through
EV start-up Lordstown (RIDE) just hit another major hurdle in its journey to bring the Endurance electric pickup to market. According to an SEC filing on Monday, Lordstown may be facing bankruptcy after Foxconn, which has been a lifeline for the company thus far, signaled an end to their investment agreement.
Lordstown has faced an uphill battle in bringing its first electric model, the Endurance pickup, to the market since its founding in 2018.
After going public on the US NASDAQ exchange in 2020, Lordstown became one of the high-profile EV stocks alongside Canoo (GOEV), Arrival (ARVL), Nikola, Faraday Future (FFIE), Rivian (RIVN), Lucid (LCID), and more.
Many of the start-ups mentioned above have experienced similar financial hardships, with rising input costs and supply chain disruptions.
To make matters worse, over the past year, the Federal Reserve has raised interest rates at a pace not seen since the 80s. High-growth companies like those in the electric vehicle market have seen their valuations crater, making it harder to access cheap funding through equity raises.
Although Lordstown claimed the initial batch of 500 Endurance trucks was out for delivery last November, the company voluntarily recalled them, halting production over quality issues.
Lordstown has faced bankruptcy several times last year, yet the Taiwanese electronics manufacturer Foxconn has been there to back the EV start-up financially, with several investment rounds to revamp the program.
According to Lordstown’s SEC filing Monday, that may no longer be the case. With the Foxconn deal falling through, the start-up says bankruptcy is a possibility.
Lordstown faces bankruptcy with Foxconn backing out
Lordstown’s 8-K filing indicates Foxconn may be looking to part ways with the young EV start-up.
On April 21, 2023, Foxconn sent a letter to Lordstown stating the company was in breach of the previous investment agreement after receiving a delisting notice from the NASDAQ stock exchange.
The notice is due to Lordstown’s stock price falling below the minimum trade requirement of $1.00 for 30 consecutive trading days. Foxconn says it will terminate the investment agreement if it’s not resolved within 30 days.
Lordstown says it has notified Foxconn that it believes the breach allegations in the notice are without merit.
Lordstown also says the investment agreement, by its terms, does not permit Foxconn to terminate it following the initial closing. It adds:
In any event, Foxconn cannot exercise termination rights because Foxconn has breached the Investment Agreement by failing to use necessary efforts to agree upon the EV program budget and EV program milestones to facilitate the funding of the additional Preferred Stock investment.
Therefore, Lordstown believes the investment agreement is still in effect and is in discussions with Foxconn to seek a resolution.
However, if Foxconn doesn’t provide the funding, “the company will be deprived of critical funding necessary for its operations.” The filing adds if the company is unable to resolve the dispute with Foxconn:
We may need to curtail or cease operations and seek protection by filing a voluntary petition for relief under the Bankruptcy Code.
Electrek’s Take
From the information in the filing, it seems Foxconn is looking for a way out. The company believes with Lordstown potentially being delisted from the NASDAQ, it shouldn’t be bound to the terms of the up to $170 million investment agreement.
If this is the case, Lordstown will lose its lifeline and face bankruptcy. The company is looking for a resolution with ongoing discussions with Foxconn, but if Lordstown can’t come to terms, it will be an uphill battle getting the Endurance pickup to market.
Lordstown did say it’s evaluating its legal and financial options in the event a deal with Foxconn is not made. We’ll update you as soon as we hear more on the situation.
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Environment
U.S. could reach deal with Canada that avoids oil and gas tariffs, energy secretary says
HOUSTON — The U.S. could reach an agreement with Canada that avoids tariffs on imports of oil, gas and other energy resources, Energy Secretary Chris Wright said Monday.
Wright said such a scenario is “certainly is possible” but “it’s too early to say” in response to a question from CNBC during a press conference at the CERAWeek by S&P Global. The U.S. is in “active dialogue” with Canada and Mexico, the energy secretary said.
President Donald Trump has paused until April 2 tariffs on Mexican and Canadian imports that are compliant with the agreement which governs trade in North America. Trump originally imposed broad 25% tariffs on goods from both countries as well as lesser 10% tariffs on energy imports from Canada.
It’s unclear, however, how much of the oil, gas and other energy that the U.S. imports from Canada is compliant with the United States-Mexico-Canada Agreement. Wright declined to provide specifics when CNBC asked how much of those imports are USMCA compliant.
“I’m going to avoid the details for now,” Wright said. The energy secretary said, “We can get to no tariffs or very low tariffs but it’s got to be reciprocal” in an interview with CNBC’s Brian Sullivan.
Canada’s energy minister, Jonathan Wilkinson, warned last week that energy prices will rise in the U.S. if the tariffs on energy imports go into full effect.
“We will see higher gasoline prices as a function of energy, higher electricity prices from hydroelectricity from Canada, higher home heating prices associated with natural gas that comes from Canada and higher automobile prices,” Wilkinson told CNBC’s Megan Cassella in an interview.
The U.S. has been the largest producer of crude oil and natural gas in the world for years. But many refiners in the U.S. are dependent on heavy crude imported from Canada. The U.S. imported 6.6 million barrels of crude oil per day on average in December, more than 60% of which came from Canada, according to the Energy Information Administration.
Wright acknowledged that the tariffs are creating uncertainty in energy markets as negotiations continue.
“We’re in the middle of negotiations for where things are going to go with tariffs, so that feels frightening and gripping right now but this time will pass,” Wright said. “Deals will be made, we’ll get certainty and we’ll have a positive economic environment for Americans going forward.”
U.S. crude oil fell more than 1% Monday to close at $66.03 per barrel, while global benchmark Brent closed at $69.28 per barrel. Crude oil futures have pulled back substantially as Trump’s trade policy creates uncertainty and OPEC+ has confirmed that it plans to gradually bring back 2.2 million barrels per day of production beginning next month.
Apple is rolling out a notable update to Apple Maps EV Routing for Ford drivers. Starting today, Ford Mustang Mach-E and F-150 Lightning drivers can use Apple Maps EV Routing via CarPlay to plan road trips that include Tesla Superchargers – or any station that uses the North American Charging Standard (NACS) connector.
As I’ve explained before, Ford began shipping adapters CCS to NACS adapters that allow Mach-E and Lightning drivers to charge at Tesla Superchargers last year. Until today, however, Apple Maps was unaware of this change. This meant Apple Maps EV Routing would only route Mach-E and Lightning drivers to CCS charging stations, even though a route with Tesla Superchargers might’ve been more efficient.
With today’s change, Apple Maps via CarPlay will now include NACS fast charging stations, such as compatible Tesla Superchargers, in recommended route planning recommendations.
In a blog post, Ford explains:
Apple Maps EV Routing in CarPlay allows drivers to input their route and can view the estimated battery level they will have when they get to a destination, as well as suggested charging stations along the way if charging is needed. Previously, Mustang Mach-E and F-150 Lightning drivers would have to manually open another app, then enter a NACS fast charger as a destination to have it added to their route. Now, with the Apple Maps EV Routing and NACS fast charger integration, the experience will be more seamless.
How to Use Apple Maps EV Routing in CarPlay:
- Connect your Apple iPhone to CarPlay.
- Open Apple Maps, go to Settings, and confirm your preferred charging network(s) – make sure you select a NACS fast charging station, such as Tesla Supercharger. You only have to do this once.
- Enter a destination.
- Apple Maps will then calculate the estimated state of charge you will have when you get to a destination.
- If a charge is required, depending on the fastest route, it will automatically route you to a NACS fast charging station.*
This is a significant update to the Apple Maps EV Routing experience for Ford drivers. Next up on my wishlist is support for battery preconditioning when using Apple Maps EV Routing. Android Auto added this feature last October.
The new feature is available now to iPhone users running iOS 17 or later. No software update is required for your car.
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James Murdoch, a Tesla board member and friend of CEO Elon Musk, has confirmed that he sold about $13 million in stock today as the stock (TSLA) crashed.
There has been a lot of insider trading at Tesla lately, and by trading, we mean selling – cause no insider is ever buying at Tesla.
We recently reported on Kimball Musk, Elon’s brother, and Tesla’s Chief Financial Officer Taneja Vaibhav recently selling ahead of a recent drop in the company’s stock price.
Tesla’s chairwoman, Robyn Denholm, also sold $33 million worth of Tesla shares last week and over $100 million in the last 3 months.
Now, it’s James Murdoch’s turn. The Tesla board member just confirmed, through a required SEC filing, that he sold 54,776 Tesla shares for just over $13 million today:
He sold as Tesla’s stock crashed 15% today. It is now down more than 50% from its all-time high just a few months ago.
Murdoch was appointed to Tesla’s board in 2017.
He is better known as the son of media mogul Rupert Murdoch and the former CEO of 21st Century Fox from 2015 to 2019.
Murdoch was one of the Tesla board directors who was forced to return almost $1 billion in cash and stock options to Tesla as part of a settlement for over-compensation.
Electrek’s Take
Tesla insiders are unloading, and those are just the ones we know about. Public companies only have to report insider trading for board directors and listed top executives.
For the latter, Tesla purposefully only lists 3 people: Elon, Vaibhav Taneja, Tesla’s CFO, and Tom Zhu, whose role at Tesla has bit quite fluid in recent years.
Therefore, we don’t know about the dozens of other top executives potentially selling their shares right now amid a giant correction.
It’s really suspicious because there are clear top leaders at Tesla who are often on Tesla’s earnings calls, and they are not even listed, like Lars Moravy, for example.
But it’s par for the course at Tesla, which has some of the worst corporate governance I have ever seen. It’s truly shameful.
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