Lordstown Motors Corp (NASDAQ: RIDE) shares jumped 5% in the after-hours trading on Wednesday as the electric vehicle startup said it is on track to begin limited production by the end of September and is in talks with multiple partners that could lead to additional capital infusion.
What Happened: Lordstown Motors executives told investors in a post-earnings call that it expects to secure regulatory approvals for Endurance, its electric truck, between December to January.
Commercial delivery of Endurance will begin in the first quarter to selected early customers followed by commercial deliveries in the second quarter.
Lordstown also said it is making efforts to raise fresh capital and exploring a variety of other financing options, including non-dilutive private strategic investments and debt.
The company, which has been under intense regulatory and investor scrutiny, said it is exploring new revenue options and is in “serious” discussions with several partners that are seeking ready-to-go manufacturing capabilities and could make use of its unused 6.2 million square foot manufacturing plant in Ohio that it acquired from General Motors Co (NYSE: GM).
“This is a significant market. Serious discussions are now underway with several potential partners, and we expect that many more will become attracted to the potential of our factory, as word of our decision to unlock its full potential spread through the marketplace,” Angela Strand, Chairwoman, Lordstown Motors said.
Lordstown posted a $108 million loss in the second quarter ended June 30, and ended the quarter with $366 million in cash. The company expects to finish the third quarter with more than $225 million on hand, barring any additional capital raise.
Why It Matters: The electric vehicle startup came under regulatory scrutiny earlier this year following short seller Hindenburg Research’s report that claimed Lordstown Motors was misleading investors and overstating the demand for the Endurance.
A special board committee formed to investigate the short seller’s allegations, found some company statements around truck pre-orders were inaccurate but rejected the report as false and misleading in significant respects.
The company had in June issued a grim warning that, without additional funding, it couldn’t scale commercial truck production and had serious doubts about whether it could survive the year.
Price Action: RIDE shares closed 4.29% lower at $5.58 on Wednesday but rose 5.38% in after hours trading.
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