Lordstown slashes ’21 manufacturing plans, says extra capital wanted

Lordstown Motors Corp Chief Govt Steve Burns poses with a prototype of the electrical car start-up’s Endurance pickup truck, which it should start constructing within the second half of 2021, on the firm’s plant in Lordstown, Ohio, U.S. June 25, 2020.

Lordstown Motors | Reuters

Shares of Lordstown Motors tumbled greater than 9% throughout after-hours buying and selling after the corporate slashed its manufacturing steering for the yr and stated it might want to increase extra capital.

In an announcement Monday, Lordstown CEO Steve Burns stated the corporate has “encountered some challenges” because it prepares to start manufacturing of an electrical pickup truck known as the Endurance in late-September.

Lordstown stated it expects to provide — at finest — half of the automobiles it beforehand forecasted this yr. It additionally stated its projected bills will likely be between $335 million and $350 million, up from between $220 million and $235 million. It additionally lowered its forecast for year-end liquidity from a minimum of $200 million to between $50 million and $75 million in money and money equivalents.

Burns cited “considerably increased than anticipated expenditures for components/gear, expedited transport prices, and bills related to third-party engineering assets” as causes for the rise in bills.

“We secured various important components and gear prematurely, so we’re nonetheless ready to ramp the Endurance, however we do want extra capital to execute on our plans,” he stated. “We imagine we’ve a number of alternatives to boost capital in numerous varieties and have begun these discussions.”

The adjustments are the newest blow to Lordstown. Shares of the aspiring automaker tumbled final week after Wolfe Analysis downgraded the inventory to underperform with a $1 worth goal following the debut of the Ford F-150 electrical pickup, a competitor to the Lordstown Endurance.

In March, Lordstown additionally confirmed the U.S. Securities and Trade Fee had requested data relating to claims by brief vendor Hindenburg Analysis that it misled traders.

Hindenburg accused Lordstown in a March report of utilizing “pretend” orders to boost capital for the Endurance. The brief vendor claimed the pickup was years away from manufacturing, nonetheless Lordstown maintains it is on monitor to begin making the car in September.

Lordstown went public by way of a particular objective acquisition firm, or SPAC, in October. It’s amongst a rising group of electrical car start-ups going public by way of offers with SPACs, which have turn out to be a well-liked approach of elevating cash on Wall Avenue as a result of they’ve a extra streamlined regulatory course of than conventional preliminary public choices.

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