EV startup Lordstown Motors continues to be in bother after pausing manufacturing earlier this 12 months. The Endurance digital pickup truck maker mentioned as we speak that it expects to cease producing the automobile “within the close to future” if it could’t discover a companion to maintain it afloat. The warning follows a separate submitting from earlier this week saying it might file for chapter if its cope with Foxconn can’t be resurrected.
“Because of the manufacturing delays from early January to mid-April 2023, the failure to establish a strategic companion for the Endurance, and very restricted potential to lift capital within the present market surroundings, we anticipate manufacturing of the Endurance will stop within the close to future,” the corporate wrote in as we speak’s submitting. “So far, we’ve got not recognized a strategic companion for the Endurance.”
Based on the SEC submitting, Foxconn despatched a letter to Lordstown on April twenty first, threatening to terminate the 2 firms’ funding deal, which noticed the Taiwanese producer investing as much as $170 million within the startup. (That adopted a earlier deal the place Foxconn purchased its Ohio manufacturing unit.) Within the letter, Foxconn informed Lordstown it breached the settlement as a result of the startup’s inventory value fell beneath $1 per share for 30 straight buying and selling days, resulting in a NASDAQ delisting discover. Lordstown mentioned it believes Foxconn’s claims are with out advantage and considers their funding settlement to stay in impact whereas talks proceed. Nevertheless, it concedes that chapter is on the desk if it could’t resolve the dispute “in a well timed method on phrases that permit us to proceed working as deliberate” or discover different strategic companions.
Lordstown reported a internet lack of $171.1 million within the first quarter of this 12 months, following a lack of $89.6 million in the identical quarter a 12 months in the past. The EV maker had simply $108.1 million in money (and money equivalents) on March thirty first. Its inventory value is at the moment hovering at 39 cents after peaking at $31.57 in early 2021.
It’s been a brief however bumpy trip for Lordstown, which was solely based in 2018. Two years in the past, its CEO resigned after an investigation revealed that executives lied about demand, the viability of Endurance’s expertise and its potential to begin manufacturing on schedule by September 2021. The identical 12 months, it turned the topic of DOJ and SEC investigations. GM bought its stake within the firm final March, though Lordstown did lastly start delivering the primary vans from its preliminary 500-unit order in November. Nevertheless, it then froze manufacturing in February to handle “efficiency and high quality points” and partnered with the Nationwide Freeway Site visitors Security Administration (NHTSA) on a voluntary recall to treatment a connection drawback that might reduce off motor output whereas driving.