Lordstown Motors plans to begin production of its endurance electric pickup truck before the end of the year and is moving forward with a deal with contract maker Foxconn, but it still needs more cash.
Tolerance production is set to begin in the third quarter of 2022, Lordstown said in its first-quarter financial results report for 2022. That’s almost a year after it was originally announced, and Lordstown expects to build 500 cars this year alone.
Lordstown also noted the progress of an agreement with Foxconn announced in November 2021 that would buy the Taiwanese firm Lordstown’s former General Motors factory for 23 230 million and oversee production. Foxconn chairman Yang Liu claimed in January that endurance electric truck delivery would begin this year.
But even after that deal was terminated, Lordstown said it still needed to raise extra cash to fully increase endurance production.
The startup’s operations spent $ 69 million in cash in the first quarter, including $ 21.9 million in tooling and related assembly-line costs. The rate of cash burning is likely to increase as tolerance production increases. CFO Adam Kroll reports CNBC That Lordstown will probably have to raise about $ 150 million by the end of the year.
Lordstown said Foxconn had made a total down payment of $ 200 million as of April 15, of which $ 50 million was received in Q1, ending March 31. If the contract does not close before the May 14 deadline, Lordstown says it will have to pay this down payment.
Lordstown Motor Factory – 2020
Under the terms of the agreement, Lordstown stated that it would continue to own its “hub motor assembly line, as well as our battery module and pack line assets, some intellectual property rights and other excluded assets.” However, all production will be outsourced to Foxconn. That company plans to build a 30,000 Fischer EV at the plant.
It was a rough road for Lordstown, built specifically for the reopening of the former GM plant, located in Ohio City as a startup. In 2021, founding CEO Steve Burns was replaced by current CEO Daniel Ninivagi when an SEC investigation found that the company had increased order demands.
Burns called the Ford F-150 Lightning and its specs and price a watery moment for the company. He claimed that Ford was aiming for the same market position, but that Lord Stone would be there first. With the F-150 Lightning Delivery now occurring, some may argue that Lordstown has lost its window of opportunity.