Lordstown Motors Corp has said that the production of its Endurance truck will be lower than what the company was expecting, In fact, the production this year would be almost half of prior expectations of 2,200 vehicles. The company said that the number of vehicles produced this year would be just 1,000. In other words, the company is consuming more cash than expected with production numbers much below than promised. Soon after the announcement, the shares of the company fell drastically. The value of the electric startup, which was launched last year, has also fallen. Investors are apparently showing less interest in the company which last year unveiled a prototype of the all-electric pickup truck Endurance.
Lordstown Motors is an offshoot of Workhorse Group which is also owned by CEO Steve Burns. Workhorse Group is a publicly-traded company that works in the field of battery and electric transportation technology. Workhorse was founded in 1998 and has never been financially strong. It faced financially up-downs at various points. Its offshoot Lordstown Motors had announced its plan to produce 20,000 electric trucks annually. The production was expected to begin at the former GM Assembly Plant in the second half of this year. The 6.2 million-square-foot factory was acquired by Lordstown last November. The company has made capital expenditures of USD 53 million in the first quarter this year but has failed to show any output. However, the company said that it would begin production of the electric pickup truck this year.
Burns, however, is hopeful of having robust demand for electric vehicles. “We have conducted research that shows there is going to robust demand for electric pickup trucks,” Burns recently told investors during a call. “But we need to accumulate capital as the shortage can limit our ability to manufacture the required number of vehicles. We are evaluating our capital requirement constantly,” he said. The CEO said that he was in talks with an unnamed financial entity that is considering asset-backed financing. “We have a lot of assets and zero debt. We are investing a lot of money in buying parts. There are folks that are interested in financing that.”