- Lordstown Motors warned it may not have enough cash to start commercial production of its debut pickup.
- The startup also said it had “sufficient doubts” about whether it can meet financial obligations.
- Lordstown was accused earlier this year by a short-seller of misleading investors.
- See more stories on Insider’s business page.
Electric-vehicle startup Lordstown Motors warned Tuesday that it may not have enough cash on hand to start producing its debut pickup truck at scale.
The going-concern notice added to the company’s regulatory filings indicates that Lordstown doubts it will be able to meet its financial obligations over the next year. It said its ability to do so largely depends on whether or not it can finish developing the Endurance pickup and begin commercial production, which it may not currently have the funds to do.
“The Company believes that its current level of cash and cash equivalents are not sufficient to fund commercial scale production and the launch of sale of such vehicles,” it said.”These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of issuance of these unaudited condensed consolidated financial statements.”
Shares of the company plummeted more than 16% in late trading Tuesday.
The company in 2019 purchased a former General Motors plant in Lordstown, Ohio and said it would start mass producing the Endurance, a fleet-oriented electric pickup, this fall. But on a conference call in May, Lordstown CEO Steve Burns said the company would need to raise more capital to produce the 2,000-plus units it intended to by the end of 2021, and that it may need to lower production targets.
Lordstown raised $675 million when it went public last August, but said it expects to end 2021 with between $50 million and $75 million in its coffers, down from prior forecasts.
The warning also comes months after short-seller Hindenburg Research published a lengthy report alleging that Lordstown took in fraudulent preorders and misled investors.