Lordstown Motors delays its endurance electric-pickup making once again. As the company is selling its Ohio factory, Foxconn will be buying the factory. The news comes out as the company announces its financial results for Q3 2021.
Lordstown CEO Dan Ninivaggi said, “The third quarter marked a significant strategic shift for Lordstown Motors. We announced our Agreement in Principle (“AIP”) with Foxconn regarding the sale of our Lordstown, Ohio assembly plant and the negotiation of a contract manufacturing agreement. The definitive Asset Purchase Agreement with Foxconn, implementing the AIP, was executed earlier this week.”
In most of 2021, Lordstown has been struggling with cash flow. They announced in June about their struggles with cash flow. The future was uncertain, and it doesn’t seem like they are improving anytime soon. Also, there was substantial doubt of whether the company will continue to exist beyond June 2022. They had a sizeable loss in Q1 2021 of $125 million. The company stated that its future “is dependent on its ability to complete the development of its electric vehicles, obtain regulatory approval begin commercial-scale production and launch the sale of such vehicles.”
However, as the fourth quarter starters, the company began making the first 100 pre-production vehicles. It was planned to use these vehicles for validation and other activities aimed to achieve full homologation.
Making up for the losses
There has been a delay with the manufacturing of initial pre-production models than expected. Lordstown was affected by supply chain shortages involving materials and components. Now the company says that they are planning for the production to start by 2022 including the deliveries of the Endurance.
We are thrilled to bring on Edward T. Hightower as President and Shea Burns as Senior Vice President, Operations.
Welcome to Lordstown.#RideWithLordstown
Read the press release: https://t.co/mnqvzinmag pic.twitter.com/9uG9qa7E0s
— Lordstown Motors (@LordstownMotors) November 12, 2021
A few months ago, the company thoughts there was a closure date for them, now they expect to build Endurance pickups by the second quarter of next year. Then deliver the vehicles by the third quarter. It is said that their cash flow is now going to come from the sale of the Ohio plant. Foxconn is buying the factory and keeping the company doors open. Foxconn will be contributing to the first ENdurance pickup development. Lordstown mentions in the financial sheet its transaction along with cash balances as follows:
“Cash balances of between $150 million and $180 million as of December 31, 2021, inclusive of the anticipated down payment of $100 million to be made by Foxconn under the Asset Purchase Agreement in November, and $15 million in issuances under the equity purchase agreement in October, but exclusive of any other potential financings.”