Lightning eMotors sues battery supplier and its new owner

LOVELAND — Lightning eMotors Inc., the Loveland manufacturer of light electrically powered trucks and buses, has filed a lawsuit against two companies that it said caused financial damages by failure to supply batteries on an agreed-upon schedule.

The lawsuit, filed March 9 in Larimer County District Court, charges that Romeo Systems Inc. (NYSE: RMO) failed to meet delivery schedules for batteries that it was committed by contract to deliver and that Nikola Motor Co. (Nasdaq: NKL), which bought Romeo in August 2022, interfered in the contract.

Lightning (NYSE: ZEV) alleged in the lawsuit that it and Romeo signed a contract in July 2020 in which Romeo would supply battery packs for Lightning vehicles. Romeo was permitted under that contract to accept or reject purchase orders in writing within seven days of receipt. If batteries were not delivered on time, the contract permitted Lightning to cancel the order and Romeo would indemnify Lightning for losses attributable to the failure to deliver, the lawsuit said.

Orders placed in June 2022 were accepted, then delayed. Romeo claimed its production lines were fulfilling a different product order, the lawsuit said.

Lightning also alleged that defects in the battery packs that were delivered resulted in a recall and that Romeo failed to correct the issue.

In the meantime, Romeo was being purchased by Nikola in a deal that was announced in August and closed in October. Nikola, which manufactures e-powered semi trucks — a class of vehicle not produced by Lightning — intended to use Romeo as its in-house supplier of battery packs. Nikola disclosed in a Securities and Exchange Commission filing that it had concerns about Romeo being able to supply it with the quantity of battery packs that it needed because of contract work for other manufacturers.

“We need as many batteries as [Romeo] can produce,” Nikola’s CEO was quoted in announcing the acquisition.

Nikola terminated the Lightning contract in December.

The lawsuit also said that failure of Romeo to deliver resulted in Lightning’s inability to deliver vehicles it was contracted to produce. 

The lawsuit alleges breach of contract and breach of warranty by Romeo and tortious interference with a contract by Nikola, among other allegations. Lightning seeks damages and “equitable relief including … replacement of the products.”

Contacts with Nikola Motor Co. were not returned prior to publication.

The case, filed in Larimer County District Court, is Lightning Systems Inc. v. Romeo Systems Inc. and Nikola Corp., 23cv30187.

Source: BizWest

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