Lordstown Slumps on Production Delays as Costs Rise; Seeks Capital Boost By Investing.com

By Yasin Ebrahim

Lordstown tumbled in afterhours trading Monday after warning that Endurance production in 2021 would be limited and fall short of its prior guidance by at least 50% as costs continue to rise. 

Lordstown Motors Corp (NASDAQ:RIDE) was down about 8% in afterhours trading. 

“Expected Endurance production in 2021 will be limited and would at best be 50% of our prior expectations,” the company said, adding that it would need to raise funds to execute on its strategy. 

“The timeline to start of production late-September 2021, which will be at limited capacity, remains on track. To-date, we have completed construction of 48 out of 57 prototypes and will begin pre-production vehicle (PPV) builds in July.”

The downbeat outlook comes as the company reported a Q1 net loss of $125 million.

The company revised upward its 2021 expectations for operating expenses by $115 million at the midpoint of the guidance range provided in its fourth quarter 2020 earnings release to reflect significantly higher spending.

“[W]e have encountered some challenges, including COVID-related and industry-wide related issues, as we progress towards our start of production deadline. These include significantly higher than expected expenditures for parts/equipment, expedited shipping costs, and expenses associated with third-party engineering resources,” the company said.