Shares of Lordstown Motors Corp. plummeted Feb. 28 after the manufacturer of electric pickup trucks said it planned to sell about 500 units this year, far below what analysts had been expecting. The company’s executives also said they need to quickly raise about $250 million to ensure they can follow through on their launch plans.
“We are entering a critical phase for the company,” CFO Adam Kroll told analysts on a conference call after Lordstown said it had booked $3.5 million in revenues in the fourth quarter and incurred losses of $81.2 million.
The company finished 2021 with $244 million of cash and equivalents on its books after raising $182 million in capital during the quarter. Foxconn parent company Hon Hai Technology Group provided $150 million of that amount; the company agreed last November to buy the former General Motors Corp. plant in Lordstown for about $230 million with an eye to bringing to the facility other manufacturing lines.
Lordstown and Foxconn still need to finalize contract manufacturing and joint product development agreements that would open up to Lordstown a broader supplier base, lower its costs and, CEO Dan Ninivaggi told analysts, “greatly enhance” its ability to secure funding—much of which would go toward hard tooling.
“Quite frankly, I am disappointed that we're not further along,” Ninivaggi said. “The relationship with Foxconn is very positive and the discussions are ongoing, but we need to bring that to a conclusion.”
For the full story on Lordstown's fourth-quarter 2021 report and outlook, visit our sister brand IndustryWeek.
