Cash-strapped Lordstown may tap the brakes on Endurance production
11:05 am Thursday, May 04th, 2023
(Reuters) – Lordstown Motors on Thursday reported a steep fall in its cash reserves and warned it might have to stop making its Endurance electric pickup truck in the near future unless it finds a partner.
The cash-strapped EV maker had earlier this week said it might be forced to file for bankruptcy, citing uncertainty over a $170 million investment deal with its major shareholder Foxconn.
Lordstown, named after the town in Ohio where it is based, said on Thursday it was in talks with the Apple Inc supplier but was yet to reach a deal.
In May 2022, Lordstown Motors completed a deal to sell its Ohio factory for $230 million to Foxconn, excluding assets such as the hub motor assembly and battery pack lines.
Foxconn will make Fisker Inc’s PEAR electric compact car at the Ohio factory starting next year, the EV startup has said.
Lordstown Motors had cash and cash equivalents of $108.1 million as of March 31, down from $203.6 million a year earlier.
Shares were little changed, having hit a record low of 25 cents on Monday.
Lordstown Motors and its EV peers have been struggling as access to capital tightens from rising interest rates and mounting economic uncertainty.
The company had resumed production of Endurance in March after a pause in February to address quality issues.
It said in February that it had made only 37 trucks for sale and recalled 19 vehicles delivered to customers or being used internally.
Net loss ballooned to $171.1 million in the quarter ended March 31, the company said on Thursday, from $89.6 million a year earlier.
Lordstown Motors had previously warned of substantial doubt about its ability to continue as a going concern, citing liquidity issues.
(Reporting by Tiyashi Datta and Akash Sriram in Bengaluru; Editing by Anil D’Silva and Sriraj Kalluvila)
