Lordstown Backs Production View, Sees First Deliveries In Q1; EV Startup Arrival Due Thursday
Lordstown Motors (RIDE) said Wednesday it still sees production of its electric truck starting next month with initial deliveries coming in Q1. Rival electric-vehicle maker Arrival (ARVL) will report early Thursday. RIDE stock rose late.
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Lordstown Earnings
The company continues to limited vehicle production starting in late September, backing guidance given in May. Lordstown also sees completing vehicle validation and regulatory approvals in December and January.
“This will be followed by deployments with selected early customers in Q1 in advance of commercial deliveries in early Q2, with the ramp steepening the second half of next year,” Executive Chairwoman Angela Strand.
Management also said its plant is production ready with retooling of stamping, assembly, body, and paint shops completed.
In addition, a battery line is fully commissioned, with the first electric hub motor line site commissioned and being installed now.
“We are also evaluating potential strategic partners, with multiple industry participants recognizing the tremendous advantages available to them from utilizing our well situated, 6.2 million square foot manufacturing plant and 650 acre campus,” said Strand.
Per-share losses widened to 61 cents from 11 cents a year ago. Analysts polled by FactSet expected a loss of 49 cents a share. Revenue was zero.
In a move that casts doubt on Lordstown’s future, early investor Workhorse Group (WKHS) said on Aug. 10 that it had sold most of its stake in Lordstown. Workhorse has sold 11.9 million shares since July 1, reducing its 10% stake in the Ohio-based company by two-thirds.
However, in a July 26 SEC filing, Lordstown said it had secured a deal in which hedge fund YA II would buy up to $400 million in equity of the company.
On Wednesday, the company raised its 2021 capital spending view to $375 million-$400 million, largely related to prepayments for hard tool purchases, from a prior view of $250 million-$275 million. It also sees liquidity at the end of Q3 of $225 million-$275 million, not including any funds from a capital raise vs. a prior year-end liquidity view of $50 million-$75 million.
After the last earnings call, Lordstown said it was pushing back the start of production of its electric pickup Endurance to late September. Management also said production would be limited and at best be 50% of prior its expectations.
Since then, many top managers have left the embattled company. And Lordstown on June 8 told investors that it didn’t have enough cash on hand to start commercial production and sales of the Endurance and signaled it might go out of business if it didn’t secure more funding. However, a week later, the company said it had enough money to begin production and expected to build between 15,000 and 20,000 trucks through May of 2022.
In May, short seller Hindenburg Research claimed Lordstown misled investors with false order numbers, among other things, to raise capital for its Endurance electric pickup. The Hindenburg report also said the pickup was years away from production.
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Arrival Earnings
Analysts expect British-American light commercial EV maker Arrival to post a loss of 5 cents a share on zero revenue.
Arrival says it has four EVs in development: a bus, a van, a large van and a small vehicle platform. Start of production of the bus is planned for the last quarter of 2021.
Arrival claims that its electric vehicles are the first EVs that cost the same as gas- and diesel-powered equivalents. The company says it has created an electric-vehicle platform that can be scaled to make many variants in multiple vehicle categories.
The company announced in May that it is partnering with Uber (UBER) to develop the Arrival Car, with production expected in Q3 2023.
Lordstown, Arrival Stock
RIDE stock rallied 3.2% late after closing down 4.3% at 5.58 on the stock market today. Shares are well off their 52-week high 31.80, achieved in September 2020. RIDE stock is trading well below its 50-day line, according to MarketSmith chart analysis.
Lordstown’s relative strength line is sliding and at all-time lows.
Meanwhile, ARVL stock sank 6.2% to 12.80. ARVL stock has lost two-thirds of its value since hitting a high of 37.18 intraday on Dec. 7, 2020. Arrival’s relative strength line is ticking up after notching all-time lows.
WKHS dropped 4.5% and UBER was down 2.5%.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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