Lordstown Motors, the startup electric vehicle maker that promised to revive a shuttered GM plant in Ohio, is running low on cash and may have to halt its Endurance pickup truck production.
In a regulatory filing on Tuesday, the company said it had only $259.7 million in cash at the end of March, down from $629.7 million at the end of 2020. It also warned that it had "substantial doubt" about its ability to continue as a going concern in the next year.
Lordstown Motors has been under scrutiny since March when a short-seller report accused it of inflating its order book and misleading investors about its technology. The company has also faced production delays, cost overruns, and an investigation by the Securities and Exchange Commission.
The company’s troubles are a setback for the electric vehicle industry, which has seen a surge of interest and investment in recent years. Lordstown Motors was one of several newcomers that aimed to challenge established automakers like Ford and GM in the lucrative pickup truck market.
The Lordstown Endurance, which was unveiled last June with much fanfare and a visit from former President Donald Trump, was supposed to be the first electric pickup truck to hit the market this year. The company claimed it had received more than 100,000 pre-orders from commercial fleets and individual customers.
But now, Lordstown Motors said it might need more money to start production in September as planned or to maintain minimum operating levels. It said it was exploring various options to raise more funds, including selling some of its assets, borrowing money, or issuing new shares.
The company also said it was working to address the issues raised by the short-seller report and the SEC probe and to improve its internal controls and governance. It said it remained committed to delivering high-quality vehicles to its customers.
“We believe in the long-term potential of our business and remain focused on executing our production plan for the Endurance,” said Steve Burns, Lordstown Motors’ CEO, in a statement.
But some analysts are skeptical about the company’s prospects, especially as competition heats up in the electric pickup truck segment. Ford recently unveiled its F-150 Lightning, which has received more than 70,000 reservations in less than a week. GM is also preparing to launch its electric Hummer and Silverado trucks later this year or early next year.
“Lordstown Motors faces significant challenges in terms of credibility, capital, and competition,” said Sam Abuelsamid, principal analyst at Guidehouse Insights. “They have a very narrow window of opportunity to prove themselves before they get overwhelmed by more established players.”
Abuelsamid said he was not impressed by the Lordstown Endurance’s design or performance, which he said lagged behind other electric trucks. He also questioned the company’s strategy of targeting fleet customers, who he said were more price-sensitive and less willing to take risks on new technology.
“They need to show that they have a viable product that can meet the needs of their customers at a competitive price point,” he said. “Otherwise, they will have a very hard time surviving.” @via Lordstown Motors.
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