Lordstown Motors (NASDAQ: RIDE) substantially decreased its production outlook for the Endurance electric truck this week, stating that the company needs to raise more capital. RIDE stock fell upon the release of the news.
Lordstown substantially increased its 2021 expectations for operating expenses by $115 million, due to “significantly higher spending on vehicle validation tests, the beta program, securing necessary parts and equipment for production, and for utilizing third-party engineering sources.”
In the company’s earnings report, Lordstown recorded a loss of $0.72 cents per share, worse than the predicted loss of $0.25 cents and expanding from a loss of $0.16 cents in the same period of 2020.
Management stated in reference to Endurance production for 2021; “Production will be limited and would at best be 50% of our prior expectations.” A global chip shortage has caused other car makers to cut production outlooks, however, Lordstown didn’t mention this in their statement.
CEO Stephen Burns stated that Lordstown has acquired enough cells to make it through the foreseeable future, and has purchased a sufficient amount of chips that should see the company through this year.
Lordstown has finished constructing 48 out of 57 prototypes and the company should be able to start its pre-production vehicle builds in July.
Lordstown said the company is looking for an Advanced Technology Vehicle Manufacturing loan as well as grants and tax credits across multiple jurisdictions. The company hopes to secure the ATVM’s credit facility within the next few months. The company is planning to offer up company assets as collateral against the loan and stated that a few large investments would put the company back on the rails.
The company was aiming to start pre production sometime in July or August, and to begin deliveries sometime in September. Lordstown said on Monday that its given time frame to start production in late-September of this year remains on track, but will be at a limited capacity, with production for the year now pegged at 1,000 vehicles, rather than the initially guided 2,200 vehicles.
Lordstown Motors last traded at US$9.67 on the Nasdaq.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
