LORDSTOWN, Ohio — Lordstown Motors provided an update on its first-quarter earnings during an investors report on Monday. The company says it lost nearly $90 million during the first three months of 2022, while it still tries to complete a deal with Foxconn before a deadline of later this month.
In late September of 2021, Lordstown Motors announced an agreement with Taiwan's Hon Hai Technology Group (Foxconn) to work in partnership on Lordstown Motors’ electric vehicle programs. Foxconn agreed to purchase the Lordstown facility, excluding Lordstown Motors’ hub motor assembly line, battery module and packing line assets, certain intellectual property rights and other excluded assets, for $230 million. The sale was made official in November.
The two sides agreed to a deadline of May 14, 2022 to complete the sale. Lordstown Motors announced on Monday that the deadline with Foxconn has been extended to May 18.
As part of the agreement, Foxconn made a down payment of the purchase price of $100 million by November 18, and added subsequent down payments of $50 million in January and April of 2022. An additional $57 million would be paid to Lordstown Motors upon completion of the deal.
Lordstown Motors said Monday that if the deal falls through, it will be required to refund $200 million in down payments made by Foxconn over the last several months. "If the APA does not close, we will not have sufficient available cash to repay Foxconn's down payments by the repayment deadline," Lordstown Motors said in its statement. The company had approximately $204 million of cash on hand at the end of the first quarter.
According to CNBC, Lordstown’s stock fell nearly 19% in early trading after the news was released to a new all-time low of $1.55. The shares recovered somewhat as the day went on, ending Monday’s session at $1.78, down 6.5%.
The company is targeting the third quarter of 2022 for the start of commercial production of the Endurance EV pickup truck, with initial production of approximately 500 units. Assuming a successful closing with Foxconn, Lordstown would still likely have to raise an additional $150 million or so by year-end, Chief Financial Officer Adam Kroll said Monday, per CNBC.
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