May 24, 2021
By Ben Klayman
DETROIT (Reuters) -Lordstown Motors Corp on Monday said 2021 production of its Endurance truck will be half of prior expectations and that the electric vehicle startup needs additional capital to execute its plans, sending shares down 9.6% in after-hours trading.
“We are still in a position to ramp the Endurance, but we do need additional capital to execute on our plans,” Chief Executive Steve Burns said in a statement. “We believe we have several opportunities to raise capital in various forms and have begun those discussions.”
Lordstown said Endurance production this year will be limited and would be “at best 50%” of the company’s prior expectations. It said it was still on track for the September launch of the truck, with pre-production vehicle builds slated for July.
The Ohio-based company blamed COVID-19 and industry-wide related issues that resulted in “significantly higher than expected” spending on parts, expedited shipping costs and third-party engineering resources.
Lordstown said it was still pursuing a U.S. retooling loan from the U.S. Energy Department and hopes to complete that process in the “next few months.” It previously said it was seeking a $200 million loan from the Advanced Technology Vehicles Manufacturing program, which also awarded larger loans to Tesla Inc, Ford Motor Co and Nissan Motor Co Ltd to retool factories.
Lordstown’s shares slumped in March after Hindenburg Research disclosed it had taken a short position on the electric pickup truck maker’s stock, saying the company had misled consumers and investors.
Short sellers bet the price of a stock will fall by borrowing shares in the hope of buying them back at a cheaper price and pocketing the difference.
Lordstown subsequently said the U.S. Securities and Exchange Commission had asked for information related to its merger with special-purpose acquisition company (SPAC) DiamondPeak Holdings and preorders of its vehicles. Burns said on a conference call on Monday the company was still cooperating with the agency’s investigation.
Earlier this month, Lordstown said it would restate its 2020 financial results, citing recent SEC guidance on accounting by SPACs. The issue has affected several companies that went public through SPACs.
The Ohio-based company said in January it had received more than 100,000 nonbinding production reservations from commercial fleets for its trucks. Hindenburg subsequently said those orders were “largely fictitious” and were meant to help raise capital and confer legitimacy.
Lorsdtown’s board of directors formed a special committee to review the matters raised by Hindenburg. CEO Burns said Monday the investigation is ongoing and the company will respond by the end of the second quarter.
Several EV makers over the past year have gone public via mergers with SPACs, bypassing the rigorous scrutiny of a traditional initial public offering process and riding on Tesla’s share price rally.
Lordstown’s shares fell last week after Ford introduced its electric F-150 pickup, the Lightning, and said it would initially target the same commercial customers Lordstown is aiming to attract.
On Monday, Lordstown reported a first-quarter loss of $125.2 million, or 72 cents a share, wider than the 28-cents-per-share loss expected by analysts polled by Refinitiv.
(Reporting by Ben Klayman in DetroitEditing by Matthew Lewis)