Key points:
- Lordstown Motors shares edged lower after releasing Q4 and FY 2021 results.
- The light-duty EV truck manufacturer reported better results than expected.
- The firm expects to start producing its Endurance truck in Q3 2022.
The Lordstown Motors Corp (NASDAQ: RIDE) stock price edged slightly higher after reporting positive Q4 2021 results where its GAAP earnings per share came in at -$0.42, beating analysts’ estimates by $0.30.
The company ended 2021 with $244 million in cash, which was $79 million greater than the midpoint of its previous estimates driven by disciplined spending, equity issuances, favourable working capital and the postponement of some investments to 2022.
Also Read: Best Electric Car Stocks to Buy.
The electric vehicle manufacturer reassured investors that it expects to start producing its Endurance light-duty truck in Q3 2022 via the contract manufacturing deal with Foxconn.
The EV manufacturer also wants to complete the sale of its Lordstown manufacturing facility. It is embracing a less-capital intensive business model where it outsources the production of its cars to Foxconn.
Lordstown is taking a different approach than most EV manufacturers by outsourcing the manufacturing of its trucks to Foxconn, which is an experienced manufacturing company with significant experience.
While the approach may not be popular with other EV makers, Lordstown’s strategy could ensure that its pickup trucks are manufactured to a very high quality.
The EV company will most likely avoid many quality issues plaguing other car manufacturers, especially startup companies that do not have significant experience manufacturing cars.
The company raised $182 million last year, with $100 million being Foxconn’s downpayment on the Lordstown facility and $50 million from issuing stock to Foxconn. The remaining $30 million was raised via other equity issuance.
Lordstown is currently building pre-production cars to undergo final testing before kicking off production later this year. The firm expects to build up to 500 trucks this year, rising to 2,500 in 2023.
The company is looking to raise more money to fund its Endurance light-duty truck’s production and commercial launch.
Dan Ninivaggi, Lordstown Motor’s CEO, said: “The fourth quarter marked a significant strategic shift for Lordstown Motors. We executed the asset purchase agreement with Foxconn and have made substantial progress on the terms of our contract manufacturing agreement, subject to review by the Committee on Foreign Investment in the US (CFIUS). I believe the Foxconn partnership is a critical step in unlocking the full potential of the Lordstown facility and brings multiple benefits to LMC. Our ongoing discussions with Foxconn are focused on reaching a definitive agreement for the joint development of future vehicles of the MIH platform with an appropriate funding structure to enable us to raise the necessary capital for the success of our partnership.”
Lordstown Motors shares were down 3.12% at writing and have fallen 6.96% in 2022. However, the shares have lost 83.4% in the past 12 months.
*This is not investment advice. Always do your due diligence before making investment decisions.
Lordstown Motors stock price.
Lordstown Motors’ stock price edged lower today despite the positive Q$ and FY 2021 results.