• Lordstown Motors, a developer of light-duty battery-electric pickup trucks for commercial fleets, reported its Q1 2022 results today. The company is yet to generate revenue and has reported a net loss of USD 89.6 million for the quarter (USD 0.46 loss per share) compared to a net loss of USD 125.2 million a year ago (USD 0.72 loss per share).

• Lowered R&D expenses in Q1 2022 compared to Q1 2021 resulted in the narrowing losses, despite the increasing selling, general, and administrative expenses amidst new hires and related expenses, as the company prepares for the commercial launch of its pickup truck “Endurance.”

• Lordstown Motors continued successful testing of its pre-production version of the truck this quarter, with plans to begin commercial production in Q3 2022. The company targets the sale of approximately 500 units by the end of the year, with deliveries commencing in Q4.

• The company noted that its ability to continue and achieve its production targets are contingent on the closing of the sale agreement of its manufacturing facility in Ohio to the Taiwanese electronics manufacturer Foxconn by at least mid-May. If the deal is not finalized by then and Lordstown is unable to secure an extension from Foxconn, the company will have to pay back the USD 200 million down payment (including a USD 50 million received in Q1). 

• Lordstown revealed that it still requires an additional USD 150 million to commence production of the vehicles, despite the almost finalized sales deal. The funds will be allocated to complete testing, purchase materials and components, and scale production.

<ul><li> Analyst QuickTake: Lordstown Motors looked promising in late 2020 when it went public and initially announced plans to commence commercial production by 2021, with around 2,000 units in the first year of production and 32,000 units in the following year. However, production dates were pushed back by a year and the first-year production target was cut down by 75%. Furthermore, amidst growing concern and cashflow issues in mid-2021, the company announced plans to sell its only manufacturing facility in Ohio to Foxconn for USD 230 million in November 2021. As per the deal, Foxconn would become a contract assembler for the company’s pickup truck. Even with this upcoming sale, Lordstown’s capital shortage is indicative of gaps in planning at the operational and strategic levels and does not bode well for the future outlook.</ul>