Lordstown Motors plans to start production of its Endurance electric pickup truck before the end of the year, and is advancing a deal with contract manufacturer Foxconn, but it still needs more cash.
Endurance production is scheduled to start in the third quarter of 2022, Lordstown said in its first-quarter 2022 financial results report. That's about a year later than originally stated, and Lordstown only expects to build 500 vehicles this year.
Lordstown also noted progress on a deal with Foxconn announced in November 2021that would see the Taiwanese firm buy Lordstown's former General Motors factory for $230 million and oversee manufacturing. Foxconn chairman Young Liu claimed in January that the Endurance electric truck deliveries would start this year.
But even if that deal closes, Lordstown said it will still need to raise additional cash to fully ramp up production of the Endurance.
The startup's operations spent $69 million in cash in the first quarter, including $21.9 million on tooling and related assembly-line costs. The rate of cash burn will likely increase as Endurance production ramps up. CFO Adam Kroll told CNBC that Lordstown will likely have to raise about $150 million by year's end.
Lordstown said Foxconn had made down payments totaling $200 million as of April 15, of which $50 million was received during Q1, which ended March 31. If the deal doesn't close prior to a May 14 deadline, Lordstown said it will have to repay these down payments.
Lordstown Motors factory - 2020
Under the terms of the deal, Lordstown said it would continue to own its "hub motor assembly line, as well as our battery module and pack line assets, certain intellectual property rights and other excluded assets." All manufacturing would be outsourced to Foxconn, however. That company also plans to build a $30,000 Fisker EV at the plant.
It's been a rough road for Lordstown, which was formed specifically to reopen the former GM plant, located in the startup's namesake Ohio town. In 2021, founding CEO Steve Burns was replaced by current CEO Daniel Ninivaggi after an SEC inquiry found that the company had been inflating order claims.
Burns had called the Ford F-150 Lightning, and its specs and pricing, a watershed moment for the company. He claimed Ford was targeting the same market position, but Lordstown would get there first. With F-150 Lightning deliveries now taking place, some might argue that Lordstown has lost its window of opportunity.