electric car maker Lordstown Motors Today it released its second-quarter 2022 earnings report, and while no EV has been submitted yet, the company reported its first operating profit.
Lordstown Motors ($ . ride) is often included in the same discussion with a group of new electric car makers to be introduced to the public, such as Rivian and Lucid Motors. Like many of its peers, the company has had its fair share of difficulties scaling up production.
If you remember, the current EV leader, Tesla (60.9% market share), also struggled initially to mass-produce its compounds. In 2018, Tesla increased production from about three cars per day to reach its goal of 5,000 EVs per week.
Although Lordstown has yet to introduce its first vehicle, the company has great market expectations, targeting the light duty truck market.
In fact, Lordstown was widely expected to be one of the first companies to bring an electric truck to market. But, like the old automakers stronghold And the GM Even newcomer Rivian has defeated the company to market its products Rivian R1T.
The company has repeatedly delayed production to raise funds. To make matters worse, former Lordstown CEO Steve Burns and CFO Julio Rodriguez quit suddenly last year.
Since then, the company has undergone executive changes. Last month, Lordstown announced that Edward T. Hightower, the company’s president, would take on the role.
Now the fate of the company’s flagship model, and Endurance, Depends on its ability to finance it. Adam Kroll, Lordstown Chief Financial Officer, on his site Profits for the second quarter of 2022He said:
Our success and ability to implement our plan depends on our ability to raise additional capital.
However, he also noted that the company is in a better cash position, at $236 million, than it had planned. At the same time, Lordstown also has more runway and will need less capital raising in 2022.
Lordstown earnings results for the second quarter of 2022
Lordstown Motors posted its first operating profit of $61.3 million, but not due to the sale of electric vehicles. Instead, the electric vehicle manufacturer sells its Ohio plant to Taiwan’s Foxconn Electronics.
The sale generated $101.7 million and another $18.4 million in reimbursement of operating expenses. Meanwhile, Foxconn plans to use the facility for construction Fisker Pear EV.
The company has also formed a joint venture (JV) with Foxconn, where Lordstown will be its primary electric vehicle partner in North America. The joint company is looking for customers for the first car produced.
Another key thing to note is that Wordstown’s core operating expenses are down 33% from the first quarter and 47% over a year ago. Wordstown CEO Daniel Ninivaji summed up the company’s second-quarter 2022 earnings excellently:
Over the past year, we’ve recruited and developed an experienced senior management team, made significant progress toward unlocking endurance, transitioned to a flexible and less capital-intensive business model, created a new vehicle development platform with Foxconn, and raised some additional capital.
Lordstown is reaffirming its goals for 2022. The company plans to begin commercial production of the Endurance EV in the third quarter, with deliveries expected to begin in the fourth quarter.
At the same time, the ability to measure capacity production will depend on whether it can raise capital and reduce costs. So far, Lordstown expects it will need to raise at least $50-75 million, down from $150 million previously.
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