DETROIT — Lordstown Motors Corp said on Monday that 2021 production of its Endurance truck will be half of prior expectations and that the electric vehicle startup needs additional capital to execute its plans, sending shares down 9.5% in after-hours trading.
“Capital may limit our ability to make as many vehicles as we would like,” Chief Executive Steve Burns said on a conference call.
Lordstown is looking at options to raise more capital, including asset-backed financing and investments from strategic partners like other automakers, said Burns, who added the company is not for sale. General Motors Co owns a stake in Lordstown.
Burns said Endurance production this year will be limited and would be “at best 50%” of the company’s prior expectations of 2,200 trucks. He said it was still on track for the September launch of the truck, with pre-production vehicle builds slated for July. Deliveries are scheduled to begin in the fourth quarter.
The Ohio-based company blamed COVID-19 and industry-wide related issues that resulted in “significantly higher than expected” spending on parts, expedited shipping costs and third-party engineering resources.
Lordstown also said it was still pursuing a U.S. retooling loan from the U.S. Energy Department and hopes to complete that process in the “next few months.” It previously said it was seeking a $200 million loan from the Advanced Technology Vehicles Manufacturing program, which also awarded larger loans to Tesla Inc, Ford Motor Co and Nissan Motor Co Ltd to retool factories.
Lordstown’s shares slumped in March after Hindenburg Research disclosed it had taken a short position on the electric pickup truck maker’s stock, saying the company had misled consumers and investors.
Short sellers bet the price of a stock will fall by borrowing shares in the hope of buying them back at a cheaper price and pocketing the difference.
Lordstown subsequently said the U.S. Securities and Exchange Commission had asked for information related to its merger with special-purpose acquisition company (SPAC) DiamondPeak Holdings and preorders of its vehicles. Burns said on Monday the company was still cooperating with the agency’s investigation.
The Ohio-based company said in January it had received more than 100,000 non-binding production reservations from commercial fleets for its trucks. Hindenburg subsequently said those orders were “largely fictitious” and were meant to help raise capital and confer legitimacy.
Lordstown’s board of directors formed a special committee to review the matters raised by Hindenburg. CEO Burns said Monday the investigation is ongoing and the company will respond by the end of the second quarter.
Several EV makers over the past year have gone public via mergers with SPACs, bypassing the rigorous scrutiny of a traditional initial public offering process and riding on Tesla’s share price rally.
Burns said it has begun work on its second vehicle, an all-electric van, and will show a prototype this summer.
On Monday, Lordstown reported a first-quarter loss of $125.2 million, or 72 cents a share, wider than the 28-cents-per-share loss expected by analysts polled by Refinitiv.
(Reporting by Ben Klayman in Detroit; Editing by Matthew Lewis)