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Lordstown Motors Corp. endures to start production

LORDSTOWN — Electric-vehicle startup Lordstown Motors Corp. has begun commercial production of its flagship model, the full-size Endurance pickup truck, albeit slowly.

The company announced Thursday it has completed two trucks for sale, with a third to be completed shortly as it continues to ramp up production to 500 saleable vehicles while continuing to contend with parts availability, quantity and pedigree issues in its supply chain.

Lordstown Motors expects to deliver 50 trucks to customers this year, and up to 450 more in the first half of 2023, as long as it can raise enough capital, according to a new release.

“We expect to increase the speed of production into November and December,” said Edward Hightower, Lordstown Motors CEO and president. “Our homologation and certification processes are proceeding as planned.”

Homolgation is whole-vehicle approval.

The trucks are being manufactured by Taiwanese technology and electronics giant Foxconn, which acquired the former General Motors assembly plant from Lordstown Motors for $230 million in May. Part of that deal was that Foxconn, perhaps best-known for assembling Apple’s iPhone, would become the contract manufacturer for the Endurance.

Another critical part was a joint venture agreement with Foxconn to co-develop future electric vehicles.

“We have been a strong believer in Lordstown Motors going back to the massive supply chain and procurement event we hosted for them in 2020,” said Guy Coviello, president / CEO of the Youngstown / Warren Regional Chamber. “It is now thrilling to see the company take this next step after overcoming many hurdles, including COVID disruption.”

“We look forward to them growing into a major staple in our community. The (Mahoning) Valley is proud of its vehicle manufacturing heritage, and Lordstown Motors is now officially part that legacy,” he said.

BUMPY ROAD

Getting to Thursday’s announcement has been a bit of a rough road for Lordstown Motors, which has had to endure multiple issues since it announced in late 2019 it had acquired the plant from GM for $20 million.

Among them were raising money and a stinging short-sellers report in March 2021 that accused the company of misleading investors regarding its order book. That report led to a flurry of lawsuits against the company, and later, an internal investigation substantiated claims that statements by top executives about preorders for the Endurance were inaccurate.

The U.S. Justice Department and U.S. Securities and Exchange Commission have also opened inquiries into the matter.

In June 2021, company founder and CEO, Steve Burns, and Chief Financial Officer Julio Rodriguez abruptly left the company without reason, but their departure was in sync with Lordstown Motors’ admission regarding the inaccurate statements over the truck.

Burns was replaced by former chief executive Dan Ninivaggi, who with other newly appointed executives, shifted the company’s focus away from manufacturing toward engineering and developing electric vehicles.

It was under this team the company finalized the sale of the plant and joint venture agreement with Foxconn that formed MIH EV Design LLC. Hightower in August said the first vehicle program under the new company would be announced in the coming months. Foxconn has committed $100 million to the new company.

UPDATE

Lordstown Motors said it anticipates ending the third quarter with approximately $195 million in cash and cash equivalents, including $27.1 million of proceeds from equity issuances during the third quarter.

It predicts it will end 2022 with about $110 million in cash and cash equivalents, excluding any additional capital raises and funding of any contingent liabilities.

“Our cash outlook is better than our previous outlook by approximately $75 million and we continue to explore opportunities for capital raising alternatives, including in connection with the initial Foxconn JV program and strategic partnerships,” a the release states.

The company also reported Thursday that Federal Motor Vehicle Safety Standards crash testing has been successfully completed and environmental applications have been submitted.

“We also continue to accumulate test miles on the vehicles, finalize other certifications, and complete software updates as we work to ensure the best experience for our customers,” the release states.

The Endurance recently was also named a semifinalist in the North American Truck of the Year competition. Its competition are the Chevrolet Silverado ZR2 and Ford’s F-150 Lightning

rselak@tribtoday.com

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