The pickup truck faces yet another delay.
While other electric vehicle startups such as Rivian and Lucid Motors have faced their share of challenges, it pales in comparison to the issues plaguing Lordstown Motors. The Ohio-based manufacturer has had to contend with an SEC investigation, which eventually led to founder Steve Burns stepping down from his position. Recently, General Motors sold its shares in the company - not something that inspires confidence amongst investors.
Lordstown announced on Monday that it will require an additional $150 million (not including the money gleaned from the $230 million Foxconn deal) to put the long-awaited Endurance pickup truck into production. "We are managing through a tough macroeconomic environment, and we are focused on managing our liquidity as we bring the Endurance to launch," said CFO Adam Kroll. He added, "At the same time, we understand that raising additional capital is critical to our ability to achieve our business plan in 2022 and beyond."
This was announced in the company's 2022 Q1 financial results, along with news that the company will postpone the aforementioned sale of assets to Foxconn by several days. This saw the company's shares plummet by as much as nearly 20%. Lordstown has delayed the deal closure to May 18 - the Taiwanese multinational has already paid $200 million of the agreed-upon $230 million purchase price, for assets including the former GM-owned Ohio plant.
If, for some reason, the deal doesn't go through, Lordstown Motors will have to pay the $200 million back. The call for an additional $150 million is due to the postponement of tooling investments which, says Lordstown, will allow the company to lower production costs and improve the Endurance for the future. Without the required tooling, the cost to build the EV will exceed the sale price.
The company reported a net loss of $89.6 million for the quarter ending March 31 which, doesn't sound encouraging, but does represent an improvement over the same period last year. "Our team members are incredibly committed and continue to work tirelessly to execute...our priorities," said Kroll.
Lordstown provided a glimmer of hope in February this year when it announced that pre-production examples of the Endurance were making their way down the production line. While the company is in the final stages of selling its facility to Foxconn, the electric pickup truck will continue to be made at the Ohio-based facility, alongside the new Fisker EV models.
Despite the less than ideal situation, the company president, Edward Hightower, remains positive. "We cannot wait for more customers to experience the Endurance, as we expect that they will love it," he said.
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