Lordstown Motors has begun production of its Endurance electric pickup truck. The U.S. electric car startup is having the electric truck built by contract manufacturer Foxconn, which bought the Lordstown car plant in the U.S. state of Ohio with this in mind.
However, production volume will be slow to increase due to supply chain constraints: Now that the first two Endurance vehicles have been manufactured, an initial 50 or so Lordstown Endurance units are to be produced this year before up to 450 more units are built and delivered to customers in the first half of 2023. Sales are scheduled to start in the fourth quarter – subject to full homologation testing and the necessary certification, the company says.
The production ramp-up will be the responsibility of Edward Hightower, who joined Lordstown in November 2021, initially starting as president and also taking over the CEO post from Daniel Ninivaggi in July 2022. The latter moved to the executive chairman post to focus on capital and partner fundraising. The management restructuring was aimed at “accelerating efforts to launch production of the pickup,” according to an article published by Reuters news agency in the summer, among others.
“We will continue to build at a slow rate as we address remaining part pedigree and part availability issues. We expect to increase the speed of production into November and December,” Hightower shared. “We expect to deliver approximately 50 units to customers in 2022 and the remainder of the first batch in the first half of 2023, subject to raising sufficient capital.”
For Lordstown, a successful start to production is essential. The electric car startup is struggling with tight funding. That’s why it came up with the unorthodox constellation with Foxconn as the buyer of the Lordstown plant, where the Taiwanese build the Endurance, among other things, on behalf of the startup. Foxconn signed the final purchase agreement in November 2021. The purchase price was $230 million. Foxconn also acquired $50 million worth of Lordstown shares and will also receive 1.7 million stock warrants as part of the deal upon closing.
The Taiwanese-U.S. collaboration flushes cash into Lordstown’s coffers and allows the startup to “transition to a less capital-intensive business model.” Specifically, the company’s management currently expects to “end 2022 with approximately $110 million in cash and cash equivalents.” They continue to explore capital raising alternatives, he said.
Lordstown is notoriously experiencing unsteady times. In June 2021, the startup officially warned of going-concern risks for the company in a filing with the U.S. Securities and Exchange Commission. In parallel, founder Steve Burns and his CFO Julio Rodriguez resigned. Previously, short-seller Hindenburg Research had levelled serious accusations against the company, including the lack of production readiness of prototypes shortly before the start of production and also faked pre-orders. Production targets were previously cut and higher capital requirements were announced.
Since then, Lordstown Motors has regularly revised production figures downward. In the annual report for the first quarter of 2022, there was still talk of 500 units in 2022 and 2,500 units in 2023. Now there are 50 Endurance models this half year and 450 in the coming half year. The original plan when the model was unveiled in June 2020 had envisaged producing around 20,000 units of the electric pickup as early as 2021.
It was also announced in March 2022 that the starting price for the Endurance would climb to $63,500 before taxes. Originally, Lordstown Motors had announced that it would offer the vehicle starting at $52,500. In addition, U.S. carmaker General Motors sold its stake in the electric car startup a few months ago.
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