Workers install door hinges on the bodywork of a prototype Endurance electric pickup truck on June 21, 2021 at the Lordstown Motors assembly plant in Ohio.
Michael Wayland | CNBC
Start the attached electric truck Lordstown Motors on Thursday reaffirmed its plan to begin commercial production of the first vehicle this quarter and roll out its first customer deliveries later this year.
Lordstown CEO Edward Hightower said production of the Endurance pickup truck would be slow and largely dependent on available capital. He said the company only expects to produce about 500 vehicles by early 2023 – an extremely slow rate of production growth by industry standards.
Chief Financial Officer Adam Kroll said the company would need to raise “significantly more capital” to produce the initial 500 Endurance electric pickups, although the company expects less money to be needed than previously thought. before.
Shares of Lordstown jumped as much as 27% in Thursday morning trading to $3.73 a share. Shares are down about 15% this year and are down 58% from their 52-week high of $8.93 per share. The company’s market capitalization is around $740 million.
The company said it will need to raise between $50 million and $75 million this year, down from its previous projection of $150 million. Lordstown will need more capital by 2023, Kroll said.
Lordstown, along with it second quarter resultssaid its $236 million cash balance at the end of the first half was above internal expectations and extended the cash-strapped company’s runway — but not enough to finance production.
The company reported its first-quarter operating profit of $61.3 million for the period ended June 30, despite not delivering any vehicles, thanks to profits related to the sale. factory in Ohio for contract manufacturers. Foxconn. Profits include a $101.7 million profit from the sale as well as a $18.4 million reimbursement for operating expenses from Foxconn.
Lordstown and Foxconn announced in November plans for the Taiwan-based company to buy the facility and a deal for the struggling startup’s pickup company Endurance. The deal was announced as Lordstown was in dire need of cash, delayed production of its pickups and was engulfed in controversy following the scandal. resignation of its CEO and founder Steve Burns earlier this year.
Lordstown, gone public in October 2020, is among a group of electric vehicle startups that have been listed through special purpose acquisitions, or SPACs, since the turn of the decade. The deals were initially celebrated by Wall Street and investors, but controversy, product delay, lack of finance and executive shake-ups sent shares of most companies plunging.
Lordstown was originally slated to be one of the first, if not the first, to release an electric pickup truck, with initial estimates as early as 2020. However, Synthetic engine, Rivian Automotive and Ford Motor all beat the company to marketing after internal problems and delays with Endurance.
The electric Ford F-150 is squarely positioned to compete with Endurance for the commercial pickup truck 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.