Lordstown May Build Vehicles For Other Automakers On Contract
13
Sponsored Links
Lordstown Motors has announced its intention to build vehicles on contract for other automakers at its sprawling assembly plant in Ohio.
Lordstown Chairwoman Angela Strand said this week the company is looking to build vehicles on behalf of outside companies in an effort to generate new streams of income. The company is currently attempting to raise more capital in order to begin production of its Endurance electric pickup truck, which will be marketed toward fleet operators.
“We are exploring multiple partnership constructs,” Stand said during a conference call this week, as quoted by Reuters. “That includes contract manufacturing, that includes licensing.”
“We’re discussing with multiple (automakers) who are interested in exploring how they can leverage the assets that we have,” she added. “This is a critical, strategic pivot for us. A decision that we believe will lead to significant new revenue opportunities.”
Lordstown Assembly exterior in 2012
Lordstown Motors purchased the Lordstown Assembly plant from General Motors in late 2019. GM shuttered the plant in early 2019 after it pulled the plug on the Chevy Cruze compact car began looking for a new buyer for the facility shortly after. Lordstown Motors says it will need about 30 percent of the 6.2 million square foot plant’s total capacity to produce the Endurance, leaving plenty of space for it to produce EVs on behalf of other automakers and startups with less manufacturing know-how.
Similar to embattled EV startup Nikola, Lordstown Motors has faced scrutiny from the media, analysts and investors over some of the claims it has made regarding its products. In May, the U.S. Securities and Exchange Commission launched an investigation into the automaker after a short-seller report published by Hindenberg Research claimed it misled investors in order to raise capital. Lordstown said previously that it had racked up 100,000 non-binding pre-orders for the Endurance, but Hindenberg claimed these preorders were “largely fictitious,” and ” used as a prop to raise capital and confer legitimacy.”
According to Reuters, Lordstown Motors had $366 million in cash and equivalents at the end of Q2 and predicted this figure would fall to somewhere between $225 million and $275 million by the end of Q3. Analysts have said previously the company would need to raise an additional $2.25 billion in capital by 2025 in order to remain solvent. Lordstown said in July it had entered an agreement with hedge fund YA II PN Ltd to purchase $400 million in shares over the next three years, which will provide it with a portion of the capital it needs.
Subscribe to GM Authority for more General Motors investment news, General Motors business news, and around-the-clock General Motors news coverage.
Sponsored Links
It would be hard to believe any start up would trust Lordstown Motors to manufacture anything. Lordstown has a lot of problem with their own vehicles they have not solved yet. Anyone who need contract manufacturing is ore likely to go to someone like Magna, who knows how to design, engineer, certify and manufacture.
I think this is their way of begging GM to buy them out. They’re the only company I can think of that would have Lordstown build anything.
GM would not go anywhere near Lordstown… GM told them “NO” when they asked for more investment. Lordstown Motors is a slow motion train wreck of a company.
GM has adequate extra capacity in their own Us plants.
No question they have major financial and management issues but what are the problems with their truck that they haven’t solved?
The only outside thing is someone comes in and buys Lordstown for pennies on the dollar and put their own operation in the building.
Apple is building a car. They were in talks with Hyundai to build it but then they blurted out the news of the talks and Apple withdrew.
It has been speculated Foxconn a long time Apple partner was also in talks. If they needed a plants this one would work and Apple has enough money to make what ever they want happen there.
Not saying that is what is going on but GM is not involved and I don’t expect any deal would put Lordstown motors in charge of this.
Nobody will come and and buy that plant (especially not Foxconn or Apple who use only state of the art production and processes) , it would cost more to modernize it than to build a new one. That is why GM dumped it in the first place. Tesla showed in Fremont, and Rivian in Normal Ill, trying to restore the old plants ends up taking longer and costs more than building a new state of the art greenfield facility, and optimizing for your product.
If a company like Apple throws money around they typically do it wisely, not buying old fixer uppers and trying to nurse them back to health.
Interesting theory C8.R.
Apple, Alphabet – deep pocket tech companies looking to expand into auto production, could pick this company up for a lot less than starting from scratch.
Hopefully, the technology developed at Lordstown won’t be sold for pennies on the dollar to Foxconn or some other overseas company, like what happened to Solyndra.
Ya, Apple goes looking for Discounts when making acquisitions… NOT!!!!!
Hope their better looking than this ugly thing, must be out of work GM designers doing this.
How is Lordstown even in business still? Someone should take this company behind the barn and put them out of their misery. Absolutely pathetic.
Lordstown starting limited production next month, first etruck to market. Just showed their military vehicle in Michigan at gov expo.Lots of potential and at the current stock price it’s a no brainer for me to pick up more shares.
How’d that work out for you?