While 2023 has been a rocky year for the automotive industry, it’s been quite a rough year for Lordstown Motors, an EV startup that recently started production of its Endurance pickup truck. After pausing production of its truck to address quality issues in its Ohio plant—a former GM facility—the automaker said its production is at risk because it might be unable to find a strategic partner.
In an unscheduled quarterly earnings filing, the company said the current financial climate and government investigations are making it difficult for it to raise money. “To date, we have not identified a strategic partner for the Endurance. To the extent we do not identify such a partner, we anticipate that production of the Endurance will cease in the near future. We also face significant contingent liabilities related to ongoing claims against us and government investigations. The ability for us to raise capital in the current market environment is extremely limited.”
Foxconn, an Apple supplier, signed a deal in November of last year to invest $170 million in Lordstown Motors, but the Ohio automaker recently said it could be forced to file for bankruptcy given that Foxconn cited a breach of their agreement. “We are seeking strategic partners, including other automakers, to provide additional capital or other support to enable us to scale the Endurance program and to develop new vehicle programs in cooperation with Foxconn or otherwise,” Lordstown said in its quarterly filing.
Lordstown’s finances have been in trouble for a long time, but the company reported a loss of $171.7 million in the first quarter of this year. Its production issues have also prevented the startup from growing its sales, which were focused on commercial customers. “Our expected limited production levels and the fact that we have not achieved consistent serial production has made it more difficult to get support from commercial fleets or fleet management companies in the marketing, sale and distribution of the Endurance,” the company said on its quarterly earnings filing.
Besides the financial issues, the company has had problems in its factory. In February of this year, Lordstown announced a pause in the production of the Endurance to address quality issues and a recall related to an electrical connection that could result in the loss of propulsion when driving. Lordstown said the recall affected 19 vehicles that were in the hands of customers or employees. Just a couple of weeks ago, the company announced its production resumed “at a very low pace.”
Whatever its fate, the startup tried hard to bring back life to Lordstown, a town that was severely hit when General Motors shut down the plant. And while the Endurance was always meant for commercial use, the productions issues and the pandemic delayed the arrival of the electric pickup truck by several years, making it hard to gain customers.
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