Workers install door hinges on the body of a prototype Endurance electric pickup truck on June 21, 2021 at the Lordstown Motors assembly plant in Ohio.
Michael Wayland | CNBC
Embattled electric truck startup Lordstown Motors on Thursday reaffirmed its intention to begin commercial production of its first vehicle this quarter and roll out the first deliveries to customers by the end of the year.
Lordstown CEO Edward Hightower said production of the Endurance pickup would be slow and largely dependent on the availability of capital. He said the company only plans to produce around 500 vehicles through early 2023, an extremely slow production ramp-up by industry standards.
Chief Financial Officer Adam Kroll said the company will need to raise “significantly more capital” to produce the first 500 Endurance electric pickups, although the company expects it will need less cash than previously thought.
Lordstown stock jumped 27% in Thursday morning trading to $3.73 per share. The stock is down about 15% this year and 58% from its 52-week high of $8.93 per share. The company’s market capitalization is approximately $740 million.
The company said it will need to raise between $50 million and $75 million this year, down from previous expectations of $150 million. Lordstown will need additional capital in 2023, Kroll said.
Lordstown, alongside its second quarter results, said its cash balance of $236 million at the end of the first half was above internal expectations and extended the cash-strapped company’s runway – but was not not enough to finance the production.
The company reported its first quarter operating profit of $61.3 million for the period ended June 30, despite no vehicle deliveries, on gains from the sale of its Ohio plant in Foxconn contract manufacturer. The profit included a $101.7 million gain on the sale as well as an $18.4 million reimbursement of operating expenses from Foxconn.
Lordstown and Foxconn announced plans in November for the Taiwan-based company to buy the facility and a deal for the company to manufacture the struggling startup’s Endurance pickup. The deal was announced as Lordstown needed the money, delaying production of its pickup and engulfed in controversy after its CEO and founder Steve Burns resigned earlier in the year.
Lordstown, which went public in October 2020, was among a group of electric vehicle startups to go public through special purpose acquisition companies, or SPACs, since the turn of the decade. The deals were initially welcomed by Wall Street and investors, but controversies, product delays, lack of funding and management shakeups sent shares of most companies plummeting.
Lordstown was originally expected to be among the first, if not the first, company to launch an electric pickup truck, with initial estimates as early as 2020. However, General Motors, Rivian Automotive and Ford Motor have all beaten the company to market following internal testing . problems and delays with Endurance.
Ford’s electric F-150 is perfectly positioned to compete with the Endurance in the commercial pickup market. Ford’s F-150 electric pickup costs about $23,000 less than the Endurance, plus it offers first-mover advantage and the backing of a well-funded company.