Lordstown Motors says 2021 manufacturing can be half of expectations By Reuters
© Reuters. FILE PHOTO: Lordstown Motors Corp’s Endurance pickup truck is seen on the firm’s plant in Lordstown, Ohio, June 25, 2020. Lordstown Motors/by way of REUTERS
By Ben Klayman
DETROIT (Reuters) -Lordstown Motors Corp stated on Monday that 2021 manufacturing of its Endurance truck can be half of prior expectations and that the electrical automobile startup wants extra capital to execute its plans, sending shares down 9.5% in after-hours buying and selling.
“Capital could restrict our potential to make as many automobiles as we want,” Chief Govt Steve Burns stated on a convention name.
Lordstown is choices to lift extra capital, together with asset-backed financing and investments from strategic companions like different automakers, stated Burns, who added the corporate isn’t on the market. Basic Motors Co (NYSE:) owns a stake in Lordstown.
Burns stated Endurance manufacturing this 12 months can be restricted and could be “at greatest 50%” of the corporate’s prior expectations of two,200 vans. He stated it was nonetheless on monitor for the September launch of the truck, with pre-production automobile builds slated for July. Deliveries are scheduled to start within the fourth quarter.
The Ohio-based firm blamed COVID-19 and industry-wide associated points that resulted in “considerably larger than anticipated” spending on elements, expedited delivery prices and third-party engineering assets.
Lordstown additionally stated it was nonetheless pursuing a U.S. retooling mortgage from the U.S. Power Division and hopes to finish that course of within the “subsequent few months.” It beforehand stated it was in search of a $200 million mortgage from the Superior Expertise Autos Manufacturing program, which additionally awarded bigger loans to Tesla (NASDAQ:) Inc, Ford Motor (NYSE:) Co and Nissan (OTC:) Motor Co Ltd to retool factories.
Lordstown’s shares slumped in March after Hindenburg Analysis disclosed it had taken a brief place on the electrical pickup truck maker’s inventory, saying the corporate had misled shoppers and traders.
Quick sellers guess the value of a inventory will fall by borrowing shares within the hope of shopping for them again at a less expensive value and pocketing the distinction.
Lordstown subsequently stated the U.S. Securities and Trade Fee had requested for info associated to its merger with special-purpose acquisition firm (SPAC) DiamondPeak Holdings and preorders of its automobiles. Burns stated on Monday the corporate was nonetheless cooperating with the company’s investigation.
The Ohio-based firm stated in January it had obtained greater than 100,000 nonbinding manufacturing reservations from industrial fleets for its vans. Hindenburg subsequently stated these orders had been “largely fictitious” and had been meant to assist elevate capital and confer legitimacy.
Lordstown’s board of administrators fashioned a particular committee to evaluate the issues raised by Hindenburg. CEO Burns stated Monday the investigation is ongoing and the corporate will reply by the tip of the second quarter.
A number of EV makers over the previous 12 months have gone public by way of mergers with SPACs, bypassing the rigorous scrutiny of a standard preliminary public providing course of and driving on Tesla’s share value rally.
Lordstown’s shares fell final week after Ford launched its electrical F-150 pickup, the Lightning, and stated it might initially goal the identical industrial prospects Lordstown is aiming to draw.
Burns stated it has begun work on its second automobile, an all-electric van, and can present a prototype this summer time.
On Monday, Lordstown reported a first-quarter lack of $125.2 million, or 72 cents a share, wider than the 28-cents-per-share loss anticipated by analysts polled by Refinitiv.
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