December 3, 2021

Lordstown Motors Says It Needs to Raise Cash, Lowers Production Forecast

Electric-truck startup

Lordstown Motors Corp.

RIDE 0.94%

said Monday it faces higher-than-expected costs, is cutting its 2021 production forecast by at least 50% and needs to raise more capital, as it tries to launch its electric pickup truck later this year.

The company said that without additional capital, it will finish the year with between $50 million and $75 million on hand, down from the $200 million forecast the company provided in March.

“Capital may limit our ability to make as many vehicles as we would like,” said Steve Burns, Lordstown’s chief executive, on a call with analysts. “We wanted to make sure everybody knew the worst, worst case.” The company reported having $587 million on hand at the end of the first quarter.

Shares in Lordstown Motors dropped 9% to $8.80 in aftermarket trading. The stock has fallen 52% this year, through the close Monday, amid questions about the strength of its preorders and production plans as well as increased competition from legacy auto makers.

Lordstown Motors is one of several electric-vehicle startups to go public in a rash of mergers with special-purpose acquisition companies over the past year. While investors initially saw impressive returns, shares of many have since retreated, as the startups missed targets and added costs in their earliest days as publicly traded companies.

Mr. Burns reiterated the company’s plans to begin production in September and deliver its first vehicles by the end of the year. The company didn’t have any sales in the first quarter.

The truck maker is in talks to secure more financing, Mr. Burns said, including discussions over an asset-backed financing plan and pursuit of an award through a federal loan program aimed at spurring electric-vehicle manufacturing.

“We have zero debt, and we have a lot of assets,” Mr. Burns said. “There’s folks that want to finance that.”

Lordstown reported a loss of $125.2 million in the first quarter, compared with a loss of $11.9 million for the year-earlier period. The startup said it spent about $92 million in the latest quarter on research and development expenses, up from $8.5 million in spending during the first quarter of 2020.

The company blamed the higher costs on Covid-19-related expenses and industrywide supply-chain issues that have increased prices for parts and equipment. Company executives said Monday that the company was also spending more than it anticipated on outside engineering support.

Lordstown Motors, named after the Ohio town where the company took over a closed

General Motors Co.

assembly plant, went public last November through a SPAC merger that valued the company at $1.9 billion and provided it with $675 million in funding. Lordstown’s debut model, the Endurance, is targeted at operators of commercial fleets for whom electric vehicles can lower projected fuel and maintenance costs.

In March, short seller Hindenburg Research took aim at Lordstown Motors with a report claiming the company had misled investors about the strength of its preorder reservations and progress made toward starting production.

After the report’s publication, Mr. Burns characterized it as half-truths and lies in an interview with The Wall Street Journal.

The following week, Mr. Burns opened Lordstown Motors’ first earnings call as a publicly traded entity, saying the company was cooperating with an inquiry by the Securities and Exchange Commission into its SPAC merger and preorders.

Lordstown also faces pressure from conventional auto makers like

Ford Motor Co.

, which showed off an electric version of its F-150 pickup truck last week. The lowest-priced versions of that truck will list for more than $10,000 less than Lordstown Motors’ announced price for the Endurance.

Mr. Burns said beating Ford to be first to market should provide it an advantage if it can begin production later this year as it plans. The company said Monday that the retooling of its assembly plant was nearly complete and the company had begun crash-testing the Endurance.

“We want as many people buying our vehicle while we’re the only game in town,” he said.

Write to Ben Foldy at Ben.Foldy@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

in Tech
Related Posts

Tesla Failed to Oversee Elon Musk’s Tweets, SEC Argued in Letters

June 1, 2021

June 1, 2021

WASHINGTON—Securities regulators told Tesla Inc. TSLA -0.21% last year that Chief Executive Elon Musk’s use of Twitter had twice violated...

The World Relies on One Chip Maker in Taiwan, Leaving Everyone Vulnerable

June 19, 2021

June 19, 2021

The company makes almost all of the world’s most sophisticated chips, and many of the simpler ones, too. They’re in...

Google Nears Settlement of Ad-Tech Antitrust Case in France

May 27, 2021

May 27, 2021

Alphabet Inc.’s GOOG -1.27% Google is nearing a settlement of an antitrust case in France alleging the company has abused...

Lordstown Motors Executives Sold Stock Ahead of Reporting Results and Before Troubles Came to Light

June 21, 2021

June 21, 2021

Several top executives at Lordstown Motors Corp. RIDE 3.30% sold off chunks of stock in the electric-truck startup ahead of...

White House Sees Electric Grid as Blueprint for Post-Colonial Pipeline Cyber Push

June 30, 2021

June 30, 2021

Electric utilities serving about 56 million U.S. customers have either installed tools to better spot cyberattacks or have pledged to...

IBM Spinoff Kyndryl Starts Quest for Growth

November 4, 2021

November 4, 2021

International Business Machines Corp. completed the spinoff of its $19 billion information technology services business on Wednesday, betting that independence...

Why PCs Are Turning Into Giant Phones

June 19, 2021

June 19, 2021

Your next laptop will be like a smartphone—only bigger, more powerful and more capable. It’s a reversal of almost a...

Smart Tires Hit the Road

June 16, 2021

June 16, 2021

Alongside the tire jack and the air pump, consider the algorithm as a tool for fixing flats. Goodyear Tire &...

Permanent Cap on Delivery-App Fees Proposed for New York City

June 24, 2021

June 24, 2021

The New York City Council is considering a legislative package aimed at significantly regulating the food-delivery app industry, including permanently limiting...

Apple Prepares Office Staff for Hybrid Workweek

June 3, 2021

June 3, 2021

Apple Chief Executive Tim Cook, in an email to staff, notified office employees of the company’s back-to-office plans. Photo: brooks...

Colonial Pipeline CEO Tells Why He Paid Hackers a $4.4 Million Ransom

May 19, 2021

May 19, 2021

The operator of the Colonial Pipeline learned it was in trouble at daybreak on May 7, when an employee found...

A Smart Lamp That Watches Kids When They Study Is a Hit in China

May 31, 2021

May 31, 2021

What looks like a children’s desk lamp, behaves like Amazon.com Inc.’s Alexa and comes with two surveillance cameras? The latest...

What Post-CEO Life Looks Like if You’re Jeff Bezos

July 2, 2021

July 2, 2021

When Jeff Bezos steps down as CEO Monday, it will be 27 years to the day he started Amazon.com Inc....

Investors Clamor for a Bigger Piece of Payments Company Stripe

June 14, 2021

June 14, 2021

Stripe Inc. has yet to go public, but investors are still craving a piece of it. The company, which processes...

What is the Metaverse? The Future Vision for the Internet

November 6, 2021

November 6, 2021

People will be able to do almost anything in the metaverse: attend concerts, watch UFC fights, participate in work meetings....