Lordstown Motors, the cash strapped electric pickup truck start-up, said on Wednesday that it will only begin “limited production” by the end of September and expects that to be the situation through the rest of this year.
The company, in a release of second quarter financials, indicated it was still in need of cash to meet its eventual production goals. Lordstown said it had $366 million in cash on hand at the end of June and expected to have no more than $275 million available by the end of September unless it comes up with new financing.
Lordstown previously has said that without new sources of financing it may not be able to continue as a “going concern.”
The report comes after a tumultuous year for Lordstown. Expectations for the start-up grew after it merged with DiamondPeak Holdings, a cash-rich special purpose acquisition company led by a Wall Street real estate investor, which came calling with about $700 million to finance the deal.
The company has burned through nearly half of that cash in just about six months. It said it was considering making room to “accommodate additional manufacturing partners” at a 6.2 million-square-foot factory in Ohio that it acquired from General Motors.
The company, which has yet to produce a truck, said it lost $108 million in the second quarter.
Lordstown has been on a downward spiral since March, when a research firm issued a report critical of the company’s claims that it had 100,000 in pre-orders for its still-to-be-built truck. The company has since disclosed that it is being investigated by federal prosecutors in New York and by the Securities and Exchange Commission.
The company tried this summer to revive its fortunes by putting in a new management team following the resignation of Steve Burns, its founder and chief executive. Lordstown, which has warned investors that it is need of cash to continue operating, struck a deal to periodically sell shares to a New Jersey investment firm to raise up to $400 million.
But auto industry experts contend that Lordstown will need much more money than that to produce its pickup, which it calls Endurance, at a scale that would make it commercially viable.
Lordstown’s stock has tumbled since the spring, when it traded for a near-record price of about $31 a share. It closed on Wednesday at $5.58.
Earlier this week, Workhorse Group, another electric vehicle manufacturer, disclosed that it had sold more than 70 percent of its original 10 percent stake in Lordstown, for about $79 million — $52 million less than the shares had originally been valued at.
Workhorse was an early investor in Lordstown, in part because Mr. Burns had been Workhorse’s longtime chief executive before leaving in early 2019 to form Lordstown.