Lordstown Motors Focused on Launching Endurance as it Faces Delays
LORDSTOWN, Ohio – Lordstown Motors Corp. CEO Daniel Ninivaggi said Thursday that the company continues to focus on launching its inaugural vehicle, the Endurance pickup, as it navigates a new future with Hon Hai Precision Industry, or Foxconn.
“It’s not all about Foxconn. We’re focused on the Endurance, we know we’ve got to get that truck out,” Ninivaggi told analysts on a conference call related to the company’s third quarter earnings.
Lordstown Motors said that the electric-vehicle manufacturer has delayed production of the Endurance pickup until the third quarter of 2022. It will continue to produce pre-production and validation models through this year and the first quarter of next year.
In September, Lordstown Motors said that it expected deliveries would begin during the second quarter of 2022.
Ninivaggi said the delays are because of supply-chain and components shortages. “It’s been a challenging quarter with raw materials shortages, parts shortages, supply-chain disruptions – particularly from international sourcing,” he says. “We’re doing everything we can to mitigate it and you have our commitment we’re going to do everything possible to get the truck out on our revised schedule.”
Lordstown Motors is expected to build about 100 pre-production vehicles over the next three months, he said.
The CEO also stated that the Endurance has attracted non-binding interest from commercial companies, including fleet management companies.
Ninivaggi also presented an update on its partnership with electronics giant Foxconn, which has moved into the EV market.
On Wednesday, Lordstown Motors announced it had signed an asset purchase agreement with Foxconn, allowing that company to acquire Lordstown’s manufacturing plant for $230 million.
According to the deal, Foxconn will pay Lordstown installments of $100 million on or about Nov. 18, $50 million by Feb. 1, 2022 and another $50 million no later than April 15, 2022. The remaining $30 million would be paid during closing.
In October, Foxconn made an equity investment in Lordstown Motors of $50 million at approximately $6.90 per share.
Among the other portions of the agreement call for Foxconn to act as a contract manufacturer for the Endurance, Ninivaggi says.
That agreement must be enacted before the asset purchase deal closes, scheduled for April 30.
The two companies have also agreed to pursue a joint venture agreement in which they would co-design, engineer and develop vehicle programs for the commercial market in North America and internationally, the CEO says.
These vehicles would be built on Foxconn’s MIH open EV platform, Ninivaggi says.
“It is relatively new,” the CEO says, noting that Foxconn unveiled three models last month that are built on this platform. “We’ve already started doing design concepts off one of those vehicles. It is a commercial van,” he says.
Two additional variants of that design could also be developed, he says.
Ninivaggi declined to provide more details, but said that the model would have an appeal both in the North American and global markets. “Foxconn I think it’s fair to say is very excited about it,” he says.
The proposed joint venture was among the factors in naming Edward Hightower as Lordstown Motors’ new president, replacing Rich Schmidt in that role.
“I brought Ed Hightower in about a month ago to do a deep dive analysis of opportunities on MIH,” he said. Hightower has extensive launch experience with companies such as General Motors, BMW and Ford Motor Co.
Not all future vehicles will include hub motors, the signature feature of the Endurance. “Hub motors are really important for the pickup truck and will be definitely part of our product portfolio going forward,” he says.
Lordstown Motors reported on Thursday that it posted a net loss of $95.8 million for the three months ended Sept. 30 and cash on hand of $233.3 million as of that date.
The company said it expects to have between $150 million and $180 million in cash by Dec. 31, 2021.
Lordstown Motors’, which trades under the ticker RIDE, stock soared on Thursday, posting a 24% gain to $6.90 per share by the market’s close. By midday, the stock had crested above $7 per share. However, the stock plunged more than 10.4% in after hours trading.
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