Lordstown Motors says it is likely to begin only ‘limited production’ of its electric truck this year.
Lordstown Motors, the cash-strapped electric pickup start-up, said on Wednesday it would only start “limited production” by the end of September and expects that to be the situation for the rest of this year.
The company, in a second quarter financial data release, said it still needed cash to meet its eventual production targets. Lordstown said it had $ 366 million in cash at the end of June and is unlikely to have more than $ 275 million by the end of September unless it finds new funding .
Lordstown has previously said that without new sources of funding it might not be able to continue operating.
The report comes after a tumultuous year for Lordstown. Expectations for the start-up grew after its merger with DiamondPeak Holdings, a cash-rich, special-purpose acquisition firm run by a Wall Street real estate investor, which called with around $ 700 million to fund the deal.
The company spent almost half of that money in just six months. He said he plans to make room to “house additional manufacturing partners” at a 6.2 million square foot plant in Ohio that he acquired from General Motors.
The company, which has yet to produce a truck, said it lost $ 108 million in the second quarter.
Lordstown has been on a downward spiral since March, when a research firm released a report criticizing the firm’s claims it had 100,000 pre-orders for its yet-to-be-built truck. The company has since revealed that it is under investigation by New York federal prosecutors and the Securities and Exchange Commission.
The company tried this summer to revive its fortunes by setting up a new management team following the resignation of Steve Burns, its founder and CEO. Lordstown, which has warned investors it needs cash to keep operating, has struck a deal to periodically sell shares to a New Jersey investment firm to raise up to $ 400 million.
But auto industry experts say Lordstown will need a lot more money than that to produce his pickup, which he calls Endurance, on a scale that would make it commercially viable.
Lordstown’s stock has fallen since the spring, when it traded at a near-record price of around $ 31 a share. It closed Wednesday at $ 5.58.
Earlier this week, Workhorse Group, another electric vehicle maker, revealed that it had sold more than 70% of its original 10% stake in Lordstown, for about $ 79 million, or $ 52 million less than the initial value of the shares.
Workhorse was an early investor in Lordstown, in part because Mr Burns had been Workhorse’s long-time managing director before leaving in early 2019 to form Lordstown.
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