EV maker Lordstown plans to sue Foxconn over funding dispute

Lordstown Motors (RIDE.O) said on Friday it plans to take legal action against investor Foxconn (2317.TW) to ensure that the Taiwanese contract manufacturer completes a planned purchase of nearly 10% of the electric vehicle startup’s shares.

The company, and its EV peers have been struggling as access to capital tightens from rising interest rates and economic uncertainty.

The cash-strapped EV maker had warned earlier it might be forced to file for bankruptcy, citing uncertainty over a $170 million investment deal with Foxconn through which the Taiwanese company would hold a near-20% stake in the money-losing U.S. firm.

It currently holds a little over 8% in the company, as per Refinitiv data.

Foxconn has since invested $52.7 million and is balking at purchasing additional shares, citing a breach of their agreement, Lordstown said.

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