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Lordstown Motors: The launch of electric trucks warns that it may stop working

The news, which sent Lordstown shares up nearly 8% in hours, was a blow not only to the company but also to the sandy industrial city from which it gets its name. For 53 years, Lordstown, Ohio, was home to a massive General Motors plant that GM closed in 2019.
Later that year, he sold the 6.2-million-square-foot plant, nearly twice the size of the Pentagon, to startup Lordstown Motors, which promised to pay union-level wages to workers to build its Endurance pickup. . It is scheduled to begin production of this truck in September.

But on Tuesday, the startup said it no longer had enough money to start commercial production. He warned that there was now “significant doubt”

; about his ability to continue working for the next 12 months.

The company’s statement said it had $ 259.7 million in cash as of March 31, after reporting a net loss of $ 125.2 million in the previous three months.

According to him, the ability to stay in business “depends on its ability to complete the development of its electric vehicles, get approval from regulators, start production on a commercial scale and start selling such vehicles.” She is looking for additional funding.

The company declined to comment further than the statement in a statement, saying it was still focused on starting production in late September.

Lordstown Motors faces stiff competition as more established carmakers announce plans for their own electric pickups.

Ford (F) presented an electric version of the F-150, the petrol version of which is the best-selling pickup in the country for more than 40 years. Tesla (TSLA), the largest manufacturer of electric vehicles, has announced plans for its Cybertruck, which should begin production later this year.
The Lordstown Motors factory where GM once worked.  Lordstown Motors warned on Tuesday that it may not have the money needed to start production of its first electric pickup vehicle.

Doubts about the company’s viability were raised long before Tuesday’s filing. In March, Hindenburg Research, a company that bets that a company’s stock price will fall, questioned the validity of contracts that Lordstown Motors told investors it had in hand. It is also said that Endurance caught fire during its first test drive. Lordstown shares lost 37% of the Hindenburg report by the end of Tuesday.

Lordstown Revival: The launch of an electric pickup brings back an old GM plant

Lordstown confirmed the fire, which he attributed to a human error in building the prototype. But he denied Hindenburg’s questions about his sales contracts and insisted he had done nothing wrong. However, he also revealed on Tuesday that he had received two subpoenas from the Securities and Exchange Commission, which is considering pre-orders for his trucks. He said he was cooperating with the probe.

Tuesday’s declaration was a revision of the 2020 results presented earlier this year.

The language in the statement of doubts about its ability to stay in business is something that worried publicly traded companies should use to warn investors. This does not mean that the closure is secure. Sears Holdings used the language in a similar filing in March 2017. It eventually filed for bankruptcy and continues to operate today, although only a small portion of its stores are still open.

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