Electric Vehicle maker Lordstown Motors Corp. (LMC) announced it was filing for Chapter 11 bankruptcy Tuesday despite receiving millions in taxpayer funding through tax breaks and grants.
LMC received $20 million in tax credits to be paid out over 15 years by the Ohio Tax Credit Authority, according to Business Journal Daily, and was pledged to receive $4.5 million from JobsOhio, a private nonprofit that collects funds through a government-mandated monopoly on spirituous liquor sales, according to Cleveland.com, but the agreement was never executed, according to a JobsOhio spokesperson. LMC also received a $40 million loan from the previous owner of the plant, General Motors, who received $60 million in subsidies from the state of Ohio, giving back only $28 million after a settlement was reached due to the stipulation that the plant was supposed to be open until 2039. (RELATED: It Will Be Years Before EVs Are As Affordable As Gas-Powered Vehicles, Auto Exec Says)
In 2009, the plant received $60 million from Ohio to build fuel-efficient and inexpensive cars when it was under the ownership of GM, but it was shut down in 2019 and sold by GM to LMC, according to Reason.
Foxconn, a multinational electronics manufacturer, announced it was investing $170 million in LMC in 2021 to build and fund the plant, which LMC alleges was not fully delivered, according to a press release from LMC, prompting the filing of Chapter 11 bankruptcy and a suit being filed against Foxconn.
Senators Hear of Major Problems with Electric Vehicles
Source: Issues, Leaders & Powerhttps://t.co/De617ov2b7 pic.twitter.com/6s8bUMWLoI— Wittgenstein (@backtolife_2023) June 21, 2023
“Despite our best efforts and earnest commitment to the partnership, Foxconn willfully and repeatedly failed to execute on the agreed-upon strategy, leaving us with Chapter 11 as the only viable option to maximize the value of Lordstown’s assets for the benefit of our stakeholders,” LMC CEO and President Edward Hightower said, according to the press release.
Foxconn denied the allegations in statements shared with the Daily Caller News Foundation.
Other automotive manufacturers have also received huge subsidies from the government for electric vehicle production. Ford Motor Co. plans to lay off at least 1,000 employees, The Wall Street Journal reports, less than a week after receiving a $9.2 billion loan from the Biden administration to invest in three electric vehicle factories in the southern U.S.
The move for more funding for electric vehicles comes as the Biden administration pushes for 50% of all vehicle sales by 2030 to be zero-emission vehicles, according to the White House. The White House also designated $370 billion in funding for climate initiatives in the Inflation Reduction Act.
This article has been updated with comments from JobsOhio.
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