Electric vehicle manufacturer Lordstown Engines released its second quarter 2022 earnings report today, and although it has yet to deliver an electric vehicle, the company has released its first operating profit.
Lordstown Motors ($RIDE) is often included in the same discussion with the recently publicized group of electric vehicle manufacturers, such as Rivian and Lucid Motors. Like many of its peers, the company has its fair share of difficulties scaling production.
If you remember, the current leader in electric vehicles, Tesla (60.9% market share), also struggled to mass-produce its vehicles. In 2018, Tesla ramped up production by about three cars a day to hit its goal of 5,000 electric vehicles a week.
Although Lordstown had yet to deliver its first vehicle, the company had high market expectations, targeting the light work truck market.
In fact, Lordstown was expected to be one of the first to market with an electric truck. But, traditional automakers like Ford and GM and even newcomer Rivian beat the company to market with its Rivian R1T.
The company repeatedly delayed production to raise funds. And to make matters worse, former Lordstown CEO Steve Burns and CFO Julio Rodriguez suddenly resigned Last year.
Since then, the company has gone through an executive reshuffle. Last month, Lordstown announced that Edward T. Hightower, the company’s chairman, would take on the role.
Our success and ability to execute our plan continues to depend on our ability to raise additional capital.
However, he also noted that the company was in a better cash position, with $236 million, than expected. At the same time, Lordstown also has more leads and will need to raise less capital in 2022.
Lordstown Second Quarter 2022 Results
Lordstown Motors posted its first operating profit of $61.3 million, but not because of a sale of electric vehicles. Instead, the electric vehicle maker is selling its Ohio plant to Taiwanese electronics maker Foxconn.
The sale generated $101.7 million and an additional $18.4 million in operating expense reimbursements. Meanwhile, Foxconn plans to use the facility to build Fisker’s PEAR EV.
The company has also formed a joint venture (JV) with Foxconn, in which Lordstown will be its main EV partner in North America. The JV is looking for customers for its first produced vehicle.
Another key thing to note is that Lordstown’s base operating expenses fell 33% from the first quarter and 47% from a year ago. Lordstown Executive Chairman Daniel Ninivaggi summed up the company’s second quarter 2022 results perfectly:
Over the past year, we have recruited and developed an experienced management team, made significant progress towards the launch of Endurance, transitioned to a less capital intensive and flexible business model, established a new vehicles with Foxconn and raised additional capital.
Lordstown reaffirms its 2022 targets. The company expects to begin commercial production of the Endurance EV in the third quarter, with deliveries expected to begin in the fourth quarter.
Meanwhile, the ability to increase Endurance production will depend on its ability to raise capital and reduce costs. So far, Lordstown expects it will need to raise a minimum of $50-75m, up from $150m previously.
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