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 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.