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Lordstown Motors has given tours of prototypes of its upcoming Endurance electric pickup truck on June 21, 2021 as part of its “Lordstown Week” event.
Michael Weiland/CNBC
Lordstown Motors It expects to end production of its 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 quarterly earnings filing Thursday, come three days after the Ohio-based company said it could go bankrupt if an earlier deal with contract manufacturer Hon Hai Technology Group goes public. Or Foxconn, located through.
“To date, we have not identified a strategic partner for Endurance. To the extent that we do not identify such a partner, we expect Endurance to cease production in the near future.” The company said in the filing.
Foxconn, the Taiwanese maker of Apple iPhones and other products, alleged last month that Lordstown breached an investment deal because its stock fell below $1 a share for 30 consecutive days of trading, prompting a delisting notice from the Nasdaq stock exchange.
Lordstown said discussions with Foxconn were continuing but had not reached an agreement. The automaker also cited “very 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 to a loss of $89.6 million a year earlier. The company said it had cash and cash equivalents worth just $108.1 million as of March 31, down 11% for the start of the year.
If Lordstown stops producing the pickup, it will be the end of a messy ride for Endurance. Lordstown was seen by some as ahead of other start-ups, thanks in large part to the massive assembly plant from which it was bought. general motors.
Lordstown was part of a frenzy of electric vehicle-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 incorporating a private company.
Most, if not all, SPAC-backed companies never come close to hitting the overpriced plans that were presented to investors as companies went public. Many of them have fledgling operations and have been embroiled in scandals, investor lawsuits, or investigations by federal officials.
There was huge interest from investors in Lordstown when the company went public in October 2020. But the excitement faded after changes in business plans and executives. Not to mention an SEC probe and competition from the Ford F-150 Lightning electric car, which is a less expensive and more reliable car.
Shares of Lordstown fell 7% Thursday to 36 cents. The stock hit an all-time low of 25 cents a share on Monday. At its peak, the company’s shares were at $31.57 in February 2021.
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