Lordstown Motors Cuts 2021 Production in Half, Says It Needs More Capital
LORDSTOWN, Ohio – Electric vehicle manufacturer Lordstown Motors Corp. said Monday that it expects to cut production in half during 2021 and would need to raise additional capital to complete its business plans and to help cover an increase in operating expenses.
Production of the Endurance, billed by the company as the world’s first all-electric commercial pickup, “will be limited and would at best be 50% of our prior expectations” in 2021, the company announced as part of its earnings report on the three months ended March 31.
The Endurance is set to begin production in late September.
“We secured a number of critical parts and equipment in advance, so we are still in a position to ramp the Endurance, but we do need additional capital to execute on our plans,” Lordstown Motors CEO Steve Burns said in a statement “We believe we have several opportunities to raise capital in various forms and have begun those discussions.”
Shares of Lordstown Motors nosedived more than 10% in after-hours trading following the earnings release.
Burns said higher than expected costs for parts and equipment, expedited shipping costs and expenses associated with third party engineering resources have proved challenging. Higher costs and delays were also attributed to the COVID-19 pandemic, he said.
The company said these factors have driven up operating costs by $115 million. The company expects operating expenses to be between $55 million and $60 million in sales and administrative costs and between $280 million and $290 million in research and development costs.
The company said it is pursuing additional funding through the federal government’s Advanced Technology Vehicle Manufacturing loan program.
Lordstown Motors is in the process of producing beta vehicles of the Endurance at its plant in Lordstown. The company has built 48 out of 57 of these vehicles so far.
“We are proud to have built 48 out of 57 of our beta vehicles and are on schedule to conclude the beta program approximately by the end of June,” Burns said.
“We are incredibly satisfied with beta vehicle test results so far. We recently passed two of the most difficult crash tests and, as such, believe we remain on track to deliver a five-star rated vehicle. We were also pleased with the mechanical performance of our Endurance at the San Felipe 250 race in Baja, Mexico last month, despite challenges that arose in predicting energy usage in the Mexican desert. We look forward to progressing along our path to commercialization as the beta program concludes this quarter, and conversations with future potential customers are expected to pick up.”
The company reported a net loss of $125 million for the three months ended March 31.
Copyright 2021 The Business Journal, Youngstown, Ohio.