Lordstown Motors (RIDE) sharply cut back its production outlook for its Endurance electric truck and said it needs to raise more capital. RIDE stock fell.
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Lordstown Earnings Report
The company posted a loss of 72 cents a share, worse than consensus for a loss of 25 cents and widening from a loss of 16 cents a year ago.
Management now sees Endurance production in 2021 „will be limited and would at best be 50% of our prior expectations.“ Other carmakers have cut production views due to the global chip shortage, though Lordstown didn’t mention it in its statement.
On a call with analysts, CEO Stephen Burns said the company has sourced enough cells contractually to make it through the foreseeable future and has bought enough chips to get through this year.
Previously, the company planned to start preproduction in the July-August time frame, and to begin deliveries in September. On Monday, Lordstown said its timeline to start of production in late-September 2021, which will be at limited capacity, remains on track.
It has completed construction of 48 out of 57 prototypes and will begin pre-production vehicle builds in July.
But Lordtown raised its 2021 expectations for operating expenses by $115 million at the midpoint of the guidance range due to „significantly higher spending: on the beta program, vehicle validation tests, securing necessary parts/equipment for production, and using third-party engineering resources.
„As a result, we need to raise additional capital to complete our business plans and have begun those discussions.“
Lordstown said it’s seeking an Advanced Technology Vehicle Manufacturing loan as well as tax credits and grants across multiple jurisdictions. It hopes to secure the ATVM loan „in the next few months.“ Burns said the company is talking with „strategic investors“ on raising money.
Meanwhile, Lordstown has begun work on a second electric vehicle, a van, built on the Endurance’s chassis.
Founded in April 2019 and backed by General Motors (GM), Lordstown plans to make electric trucks at a former GM plant in Ohio, mainly for the commercial market.
The Q1 report is the second since RIDE stock came public last October via a SPAC reverse merger.
Earnings also come ahead of an event June 21-25 at Lordstown’s Ohio headquarters, where it will offer investors and analysts tours of its factory as well as test drives of the Endurance. RIDE stock spiked last week after the announcement of the event.
Management also addressed an SEC inquiry disclosed in March tied to short seller Hindenburg Research’s allegations that Lordstown misled investors with „largely fictitious“ orders. On Monday, the company said a board committee continues to review the claims and will report before the end of Q2.
Burns noted that Lordstown has about 30,000 vehicle purchase agreements, „some of them have down payments in them… lots more teeth than in the old days.“
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RIDE Stock
Shares sank 9.7% late after closing up 0.9% at 9.67 in Monday’s stock market trading, below a 50-day line that has fallen sharply since March. RIDE stock sits almost 70% below its old high. Among other EV stocks, GM edged down 0.2%, Tesla rose 4.4% and Ford (F) fell 2%.
On Thursday, RIDE stock tanked 15% after Ford unveiled the Lightning EV, a powerful new electric version of its iconic F-150 pickup truck, also targeting commercial customers.
CEO Burns on Monday’s earnings call, said Ford’s Lightning event validated Lordstown’s strategy, saying „it was basically our truck at our price point.“ He added that he’s not sure what market Tesla’s Cybertruck is aimed at, but it’s not for the worker.
Ford priced the Lightning to start below $40,000 before tax credits, with the truck set to arrive by the middle of next year. It said a longer-range version of the Lightning costs in the mid-$50,000s. That’s roughly in line with the Endurance and raised implications for RIDE stock.
Morgan Stanley analyst Adam Jonas asked: why would you buy a Lordstown Endurance?
„At this price, capability and targeted end market, we believe the F-150 Lightning presents a major competitive threat to Lordstown,“ Jonas said.
Jonas added: „When you add in the proven breadth of Ford’s extensive commercial/dealer network (including service, parts, etc.) and more proven technology (RIDE’s in-hub motors have never been commercialized at scale in a light vehicle application), Ford’s announcement presents yet another strong commercial headwind to the RIDE strategy.“
Besides Ford, a host of automakers plan to bring electric trucks and vans to market. This fall, GM’s Hummer truck will hit the road. The R1T from Rivian, an EV startup backed by Amazon (AMZN), is supposed to go on sale in June. The Tesla (TSLA) Cybertruck is likely to arrive sometime this year.
Other EV startups, such as Canoo (GOEV), will also launch electric trucks and vans in the next one to three years.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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