Workers install door hinges on the body of a prototype Endurance electric pickup truck on June 21, 2021 at the Lordstown Motors assembly plant in Ohio.
Michael Wayland | TBEN
Controversial electric truck startup Lordstown Motors on Thursday reaffirmed plans to begin commercial production of its first vehicle this quarter and roll out first deliveries to customers by the end of the year.
Lordstown CEO Edward Hightower said production of the Endurance pickup will be slow and will depend largely on the availability of capital. He said the company is expected to produce only about 500 vehicles until early 2023 – an extremely slow production increase by industry standards.
CFO Adam Kroll said the company will need to raise “significantly more capital” to produce the first 500 Endurance electric pickups, although the company expects it will need less money than previously thought.
The company said it should raise between $50 million and $75 million this year, compared to previous expectations of $150 million. Lordstown will need additional capital by 2023, Kroll said.
Lordstown said, in addition to its second-quarter results, its cash balance of $236 million at the end of the first half of the year was above internal expectations and extending the runway for the tight company, but not enough to sustain production. finance.
Shares of Lordstown were up about 12% in the market that opened Thursday to about $3.30 a share. The stock is down about 5% this year and is 63% below its 52-week high of $8.93 a share. The company’s market cap is approximately $600 million.
The company reported its first quarterly operating profit of $61.3 million for the period ended June 30, despite no vehicles being delivered, on gains related to the sale of its Ohio plant to contract manufacturer Foxconn. Earnings included a $101.7 million gain from the sale and a $18.4 million allowance for operating expenses by Foxconn.
Lordstown and Foxconn announced plans in November for the Taiwan-based company to purchase the facility and an agreement for the company to manufacture the struggling startup’s Endurance pickup. The deal was announced because Lordstown needed money, delaying production of the pickup and sparking controversy following the resignation of CEO and founder Steve Burns earlier this year.
Lordstown, which went public in October 2020, has been one of a group of electric vehicle start-ups that went public through special acquisition companies, or SPACs, since the beginning of the decade. The deals were initially praised by Wall Street and investors, but controversies, product delays, lack of funding and executive turmoil have sent shares of most companies plummeting.
Initially, Lordstown was expected to be one of the first, if not the first, company to bring an electric pickup to the market, with initial estimates as early as 2020. However, General Motors, Rivian Automotive and Ford Motor all have the company. reports after internal issues and delays with the Endurance.
Ford’s electric F-150 is perfectly positioned to compete with the Endurance for the commercial pickup market. Ford’s electric F-150 pickup starts at about $23,000 less than the Endurance, plus, it has a first-mover advantage and the backing of a well-funded company.