Lordstown Motors Corp.’s Endurance electric pickup sits onstage during a ribbon-cutting event in Lordstown, Ohio, USA, on Thursday, June 25, 2020.
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Distressed electric vehicle jump start Lordstown Engines said it is on track to start production of its Endurance pickup in the third quarter, about a year later than originally expected. Even if he makes that start date, however, the company expects to lose money on each of the roughly 500 trucks he hopes to ship by the end of the year.
Whether Lordstown will survive long enough to meet that challenge remains in question. The financial future of the company depends on an agreement reached last September to sell your ohio factory to Taiwanese contract manufacturer Hon Hai Technology Group, better known as Foxconn. Under the terms of the deal, it is due to close on May 18. (The original terms called for the deal to close on May 14, but the sides have agreed to a four-day extension, Lordstown said Monday.)
If the deal doesn’t go through (as of Monday morning, it didn’t), Lordstown will have to repay the $250 million in down payments made by Foxconn in recent months.
A refund would deplete almost all of the would-be truckmaker’s remaining cash. Lordstown had $203.6 million in cash as of March 31 and received an additional $50 million from Foxconn in April. Almost all of that will have to be paid back if the deal doesn’t go through.
If the deal closes, Foxconn will make a final payment of $30 million, plus an additional payment of about $27 million to reimburse some of Lordstown’s costs. But that will leave Lordstown without the cash it needs to increase production of the Endurance.
Assuming a successful closing with Foxconn, Lordstown will likely need to raise an additional $150 million by the end of the year, chief financial officer Adam Kroll said Monday.
Lordstown reported a net loss of $89.6 million in the first quarter, or $0.46 per share, versus its loss of $125.2 million ($0.72 per share) in the first quarter of 2021. Revenue then and now was zero, as the company still doesn’t ship vehicles.
Lordstown operations used $69 million net of cash in the first quarter, including $21.9 million in capital expenditures on tooling and related costs for its assembly line. Its cash burn rate is likely to accelerate as the Endurance’s production start approaches.
Shares of the company fell more than 11% to around $1.70 in Monday morning trading.