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Lordstown Motors RIDE Q1 2022 earnings loss Foxconn

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Lordstown Motors Corp. An Endurance electric pickup truck stands on stage at an unveiling event held in Lordstown Ohio on Thursday, June 25, 2020.

Getty Images| Bloomberg | Getty Images

Struggling with electric vehicle startup Lordstown MotorsIt said it is on target to start production of the Endurance pickup by the end of the third quarter. This was about one year earlier than initially expected. The company still expects that it will lose money even if the production schedule is met. It also plans to sell approximately 500 trucks by the year’s end.

The question of whether Lordstown will be able to meet that challenge for long is unanswered. The financial fate of the company is dependent on the deal that it made last September. sell its Ohio factoryTaiwanese contract maker Hon Hai Technology GroupFoxconn, also known as. It must conclude by May 18 according to its terms. The original agreement required that the deal close no later than May 14. However, the parties agreed on Monday to extend the deadline by four days.

If the deal doesn’t happen – as of Monday morning, it wasn’t done – Lordstown will be required to refund the $250 million in down payments made by Foxconn over the last several months.

The truck-maker’s cash would be nearly gone if he was not reimbursed. Lordstown was left with $203.6million in cash and an additional $50million from Foxconn. If this deal does not happen, nearly all of it will have to be paid back.

Foxconn will pay a $30 million final payment, and an additional $27 million for Lordstown to cover some costs. Lordstown still won’t have enough cash to continue production of Endurance.

Lordstown, assuming a Foxconn successful close, will need to raise another $150 million by the year’s end, Adam Kroll, chief financial officer, said Monday.

Lordstown had a net loss in the first quarter of $89.6million, $0.46 per share. Its $125.2million loss ($0.72/share) was reported in the preceding quarter. first quarter of 2021. The company hasn’t shipped any vehicles yet, so revenue was null.

Lordstown used net $69million in cash during the first quarter. This includes $21.9 million for capital expenditures on its tooling line. The Endurance’s production will see its rate of cash loss increase.  

The shares of the company fell to $1.70 Monday morning, more than 11% less.

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