A plethora of financial problems has brought the American EV startup close to bankruptcy.
Lordstown Motors, the Delaware-based EV startup which developed the Endurance pickup truck, anticipates it will cease operating if a suitable investor isn’t found soon, with a recent form submitted by the company to the Securities and Exchange Commission (SEC) mentioning bankruptcy as the worst case scenario.
Lordstown issued the pessimistic statements as its main partner, Foxconn Technology Group, threatened to withhold funding because the EV startup breached their agreement. The potential cut in funding was rushed by a Nasdaq warning to Lordstown that its stock (RIDE) may be delisted after falling below a minimum of $1 per share for more than 30 consecutive days.
With just 31 Endurance pickups assembled and ready for sale as of February 2023, and just six units delivered so far, the company is now anticipating a rapid fall. In the latest 10-Q form filed with the SEC yesterday, the company expresses “substantial doubt” regarding its ability to continue, in the context of Foxconn backing out, deteriorating market conditions, and losses piling up.
Gallery: 2023 Lordstown Endurance
“If we are unable to resolve our dispute with Foxconn in a timely manner on terms that allow us to continue operating as planned, identify other sources of substantial funding, identify a strategic partner, and resolve our significant contingent liabilities, we may need to further curtail or cease operations and seek protection by filing a voluntary petition for relief under the United States Bankruptcy Code.”
In the same form, Lordstown details how it started production of the Endurance in the third quarter of 2022, with the first two vehicles being completed in September, which then went through the homologation and testing process that allowed the EV startup to start selling its electric pickup in the United States.
Production was temporarily paused in the first quarter of 2023 because of supplier-related issues, with assembly restarting at a very low pace in April. However, the company notes that everything might come to a complete stop if it fails to partner with a suitable investor:
“Due to the production delays from early January to mid-April 2023, the failure to identify a strategic partner for the Endurance, and extremely limited ability to raise capital in the current market environment, we anticipate production of the Endurance will cease in the near future.”
Lordstown went public in 2020 through a SPAC deal, which saw its valuation soar. At one point, the company claimed it secured over 100,000 orders for its electric pickup, but it was later revealed that the order count was inflated, and things deteriorated even further as a prototype caught fire in 2021 and both the CEO and CFO resigned, leaving the fate of the company wrapped in uncertainty.
Source: Lordstown Motors
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Keyword: Lordstown Motors Anticipates Endurance Production “Will Cease In The Near Future”