Lordstown Motors (NASDAQ: RIDE) revealed its Q3 2021 Financial Results on Thursday and announced that it will postpone the Endurance all-electric pickup once again. Furthermore, Lordstown Motors affirmed the sale of its Lordstown, Ohio factory to Foxconn.
The Ohio-based startup has pushed the launch of its Endurance electric pickup from Q2 to Q3 of 2022. The commercial truck was recently scheduled to enter production at some point in 2021 before financing and supply chain issues hampered its development.
“The third quarter marked a significant strategic shift for Lordstown Motors,” Lordstown CEO Dan Ninivaggi said. “We announced our Agreement in Principle (“AIP”) with Foxconn regarding the sale of our Lordstown, Ohio assembly plant and the negotiation of a contract manufacturing agreement. The definitive Asset Purchase Agreement with Foxconn, implementing the AIP, was executed earlier this week.”
Lordstown has been battling with cash flow issues for the vast majority of 2021. In June, the organization declared that it was confronting significant cash flow issues that left it is future uncertain. There was “substantial doubt” that Lordstown would keep its doors open past June 2022 in the wake of filing a sizeable loss of $125 million in Q1 2021. Lordstown’s future “is dependent on its ability to complete the development of its electric vehicles, obtain regulatory approval, begin commercial-scale production and launch the sale of such vehicles,” the organization said. It intended to start building Endurance pickups in September, yet this was evidently deferred, as per a note to investors from the Q3 Earnings Call.
“Since the beginning of the fourth quarter, we have begun building the first of what we expect to be approximately 100 pre-production vehicles that we will use to pursue a variety of validation activities aimed at achieving full homologation. This is a modest delay from earlier expectations as component and material shortages, along with other supply chain challenges, remain an issue for Lordstown Motors just as they are for the industry at large. We now expect that commercial production and deliveries of the Endurance will begin in the third quarter of 2022,” Lordstown said.
While it previously provided an expected closure date of June 2022 in the filing from June 2021, the new expectation is that Lordstown will actually want to build Endurance pickups at its factory sometime in Q2 2022 and start deliveries in Q3 2022. The influx of cash that is coming from the sale of its Ohio factory to Foxconn, which it reported in August, is helping the organization keep its doors open for a lengthy period, which will automatically add to more opportunities to develop the Endurance pickup. Lordstown subtleties the transaction alongside the cash balances on its financial sheet:
“Cash balances of between $150 million and $180 million as of December 31, 2021, inclusive of the anticipated down payment of $100 million to be made by Foxconn under the Asset Purchase Agreement in November, and $15 million in issuances under the equity purchase agreement in October, but exclusive of any other potential financings.”
The organization likewise reported the acquisition of Edward T. Hightower as President and Shea Burns as Senior Vice President, Operations.
Foxconn plans to use the facility to assemble a $30,000 vehicle called the PEAR that is being planned by California’s Fisker.
Lordstown is expecting to finish 100 pre-production Endurance trucks before the finish of 2021 for validation testing.