Lordstown Motors Corp., the electric vehicle startup that bought a former General Motors Co. plant in Ohio, said it will have to delay expanded production of its debut EV if it can’t find a partner to share costs.
(Bloomberg) — Lordstown Motors Corp., the electric vehicle startup that bought a former General Motors Co. plant in Ohio, said it will have to delay expanded production of its debut EV if it can’t find a partner to share costs.
The company said Monday it’s having discussions with larger automakers because it can’t afford to cover all the spending for tooling needed to boost output of its Endurance pickup, raising questions about the truck’s future. If no partner is found, Lordstown will focus on raising money to develop new EVs with Foxconn Technology Group, the company said.
Lordstown already has a partnership with Foxconn, the maker of Apple Inc.’s iPhone that’s manufacturing the Endurance for the startup. The Taiwanese company bought the plant and invested in Lordstown Motors, but Chief Executive Officer Ed Hightower said additional outside funds are needed.
“It is an upside-down margin on each one,” Hightower said on a conference call. “If we don’t find that partner we don’t see the business rationale to make that investment ourselves.”
Shares of Lordstown fell 5.8% to $1.06 at 11:40 a.m. in New York. The stock is down almost 8% this year and well below a peak share price in early 2021 following its public debut after a special purpose acquisition company merger.
Lordstown wants to lower materials costs for the Endurance by scaling up production, Hightower said. The company said in a securities filing that it won’t make more than 500 units without a partner. It also recorded a $14.8 million impairment charge on a parts agreement it struck with GM in 2020.
Lordstown paused output of the Endurance last month after a recall due to quality issues. The CEO said the company has a “clear line of sight” to resolving those issues and resuming production, but he didn’t provide a time frame.
(Updates with details from securities filing in the sixth paragraph.)
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