- Lordstown Motors expects to end production of its Endurance pickup truck “in the near future,” as the embattled EV startup runs out of cash and seeks additional capital.
- The comments come three days after the Ohio-based company said it may go bankrupt if a previously announced deal with contract manufacturer Foxconn falls through.
- The company said it had cash and cash equivalents of just $108.1 million as of March 31, down 11% to begin the year.
Lordstown Motors expects to end production of its Endurance pickup truck “in the near future,” as the embattled EV startup runs out of cash and seeks additional capital.
The comments, part of an unscheduled Thursday quarterly earnings filing, come three days after the Ohio-based company said it may go bankrupt if a previously announced deal with contract manufacturer Hon Hai Technology Group. or Foxconn, falls through.
“To date, we have not identified a strategic partner for the Endurance. To the extent we do not identify such a partner, we anticipate that production of the Endurance will cease in the near future,” the once-promising company said in the filing.
Foxconn, a Taiwanese maker of Apple iPhones and other products, last month alleged that Lordstown was in breach of an investment deal because its stock had fallen under $1 per share for 30 consecutive trading days, triggering a delisting notice from NASDAQ.
Lordstown said discussions with Foxconn continue but they have not reached an agreement. The automaker also cited an “extremely limited ability to raise capital in the current market environment” as an ongoing issue.
Lordstown said Thursday its net loss widened to $171.1 million in the first quarter, compared with a loss of $89.6 million a year earlier. The company said it had cash and cash equivalents of just $108.1 million as of March 31, down 11% to begin the year.
If Lordstown ceases production of the pickup, it would be the end of a chaotic journey for the Endurance. Lordstown was viewed by some as ahead of other EV startups, largely thanks to its massive assembly plant that it purchased from General Motors.
Lordstown was part of a frenzy of EV-related companies brought public during 2020 and 2021 through special purpose acquisition companies, or SPACs. They are formed as investment vehicles with the sole purpose of raising funds and then finding and merging with a privately held company.
Most, if not all, of the SPAC-backed companies never came close to reaching overinflated plans that were presented to investors as the companies went public. Many of them have fledgling operations and were involved in scandals, investor lawsuits or investigations by federal officials.
There was high interest by investors in Lordstown when the company went public in October 2020. But the excitement fizzled following changes to business plans and executives. Not to mention, a SEC probe as well as competition from Ford’s electric F-150 Lightning pickup, a less expensive and more-trusted vehicle.
Shares of Lordstown fell 7% Thursday to 36 cents. The stock hit an all-time low of 25 cents per share on Monday. At its peak, shares of the company hit $31.57 in February 2021.
Source: Business - cnbc.com
