Lordstown Motors Announces Production and Delivery Pause to Address Quality Issues, Voluntary Recall, and Timing of Fiscal Year 2022 Financial Results and Webcast
24 February 2023 - 12:30AM
Lordstown Motors Corp. (Nasdaq: RIDE), (“Lordstown Motors,” “LMC”
or the “Company”), an original equipment manufacturer (OEM) of
electric vehicles focused on the commercial fleet market, today
announced that it will release its fiscal year 2022 financial
results before market open on Monday, March 6, 2023. The Company
will then host a conference call at 8:30 a.m. Eastern Time.
Lordstown Motors Corp. also announced today that it has
experienced performance and quality issues with certain Endurance
components that have led the company to temporarily stop production
and customer deliveries since our last production update in
January. The team is diligently working with suppliers on the
root cause analysis of each issue and potential solutions, which in
some cases may include part design modifications, retrofits, and
software updates. In this regard, LMC has filed paperwork with the
National Highway Traffic Safety Administration (NHTSA) to
voluntarily recall the Endurance to address a specific electrical
connection issue that could result in a loss of propulsion while
driving. Lordstown is working with its supplier network to
implement a corrective action that the Company believes will
address this issue. The recall will affect 19 vehicles that are
either in the hands of customers or being used internally by LMC.
Vehicles waiting for shipment and vehicles in process at the
manufacturing plant will also be retrofitted with the corrective
action once components are available.
“While our experienced team has made significant progress in
addressing the underlying component and vehicle sub-system issues
affecting the Endurance build schedule, we remain committed to
doing the right thing by our customers and to resolve potential
issues before resuming production and customer shipments,” said
Edward Hightower, Lordstown Motors CEO & President. LMC intends
to provide a more detailed update on the status of these matters on
its upcoming earnings call.
About Lordstown Motors Corp.Lordstown Motors is
an electric vehicle (EV) OEM developing innovative light duty
commercial fleet vehicles, with the Endurance all electric pickup
truck as its first vehicle and being launched in the Foxconn EV
plant in Lordstown, Ohio. Lordstown Motors has engineering,
research and development facilities in Farmington Hills, Michigan
and Irvine, California. For additional information
visit www.lordstownmotors.com.
Forward-looking Statements
This report includes forward looking statements. These
statements are made under the “safe harbor” provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These statements
may be identified by words such as “feel,” “believes,” expects,”
“estimates,” “projects,” “intends,” “should,” “is to be,” or the
negative of such terms, or other comparable terminology.
Forward-looking statements are statements that are not historical
facts. Such forward-looking statements are not guarantees of future
performance and are subject to risks and uncertainties, which could
cause actual results to differ materially from the forward-looking
statements contained herein due to many factors. With respect to
the matters addressed in this report those factors include, but are
not limited to: our ability to successfully address known and
unknown performance, supply chain, quality and other launch-related
issues, some of which are or may be material or may require
additional recalls or retrofits of the Endurance, and resume
commercial production and sales of the Endurance on a reasonable
timeline in accordance with our business plan; the risk that
additional elements of our technology, including our hub motors, do
not perform as expected in the near or longer-term; our ability to
secure and receive vehicle components from our supply chain in
sufficient quantities to meet production volume plans and of
acceptable quality to meet vehicle requirements; and our ability to
deliver on the expectations of customers with respect to the
pricing, performance, quality, reliability, safety and efficiency
of the Endurance and to provide the levels of after sale service,
support and warranty coverage that they will require. No assurance
can be given that we will be able to resolve the known and unknown
performance issues with the Endurance and resume production in a
timely manner, or at all, given the high cost of producing the
vehicles and continuing expectation that any production would only
be of a limited quantity and at a slow pace.
Other factors that may impact our results and prospects include,
but are not limited to:
- our ability to continue as a going concern, which requires us
to manage costs, obtain significant additional funding to execute
our business plan, and our ability to raise such funding on a
reasonable timeline and with suitable terms;
- our ability to obtain a strategic partner for the Endurance and
to raise sufficient capital, including under the financing
arrangements we have established, in order to invest in tooling to
lower the Endurance bill of materials cost, continue design
enhancements of the Endurance to enable scaled production and fund
any future vehicles we may develop;
- the cost and other impacts of contingent liabilities and
availability of insurance coverage and/or adverse publicity with
respect to these matters, which may have a material adverse effect,
whether or not successful or valid, on our liquidity position,
market price of our stock, cash projections, business prospects and
ability and timeframe to obtain financing;
- our ability to effectively implement and realize the benefits
from our recently completed and pending transactions and agreements
with Foxconn, including the additional funding transactions under
the Investment Agreement, dated November 7, 2022, with Foxconn
Ventures Pte. Ltd, which are subject to closing conditions, our
ability to utilize the designs, engineering data and other
foundational work of Foxconn, its affiliates, and other members of
the Mobility-in-Harmony (MIH) consortium as well as other parties,
and all such parties adhering to timelines to develop,
commercialize, industrialize, homologate and certify a vehicle in
North America, along with variables that are out of the parties’
control, such as technology, innovation, adequate funding, supply
chain and other economic conditions, competitors, customer demand,
regulatory approval and other factors;
- our ability to execute our business plan, expansion plans,
strategic alliances and other opportunities, including development
and market acceptance of our planned products;
- risks related to our limited operating history, the execution
of our business plan and the timing of expected business
milestones, including the ability to effectively utilize existing
tooling, a substantial portion of which is soft tooling not
intended for long term production;
- our ability to maintain appropriate supplier relationships and
our ability to establish our supply chain to support new vehicle
programs;
- the availability and cost of raw materials and components,
particularly in light of current supply chain disruptions and labor
concerns, inflation, and the consequences of any shortages on our
ability to produce saleable vehicles;
- our ability to successfully identify and implement actions that
will significantly lower the Endurance bill of materials cost,
including identifying a strategic partner to scale the
Endurance;
- our ability to obtain binding purchase orders and build
customer relationships;
- the effects of competition on our ability to market and sell
vehicles;
- our ability to attract and retain key personnel and hire
additional personnel;
- the pace and depth of electric vehicle adoption generally;
- our expectations regarding our ability to obtain and maintain
intellectual property protection and not infringe on the rights of
others;
- our ability to obtain required regulatory approvals and changes
in laws, regulatory requirements, interpretations of existing law,
governmental incentives and fuel and energy prices; and
- the possibility that we may be adversely affected by other
economic, geopolitical, business and/or competitive factors,
including rising interest rates and the direct and indirect effects
of the war in Ukraine.
Additional information on potential factors that could affect
the financial results of the Company and its forward-looking
statements is included in its most recent Form 10-K and subsequent
filings with the Securities and Exchange Commission. All
forward-looking statements are qualified in their entirety by this
cautionary statement. Any forward-looking statements speak only as
of the date on which they are made, and Lordstown Motors undertakes
no obligation to update any forward-looking statement to reflect
events or circumstances after the date of this report.
Contacts:
InvestorsCarter W. Driscoll, CFAIR@lordstownmotors.com
MediaColleen Robarcrobar@robarpr.com313-207-5960
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