Lordstown warns it may not be able to build the Endurance: the flip side of the coin

Many companies are launching proposals related to electric mobility. Companies presenting electric vehicles that aim to displace the internal combustion models that mostly have Tesla in their sights. But although the models they want to launch are quite interesting, sometimes they do not secure enough resources to take them into production, and they end up as failed projects.

That is what may happen with the Lordstown Endurance, a model designed by the company Lordstown that was promised to begin delivery in early 2022, after production started in September. There was even talk of a fairly substantial number of pre-orders, reaching 1,000 units to be delivered initially. Considering that each Endurance unit costs 45,000 dollars, the amount of money it could have raised is enough to feel reassured.

Even so, Lordstown has just reported serious financial problems that could make the company disappear before Endurance production begins. In the document it has filed with the Securities and Exchange Commission (SEC), it states that it has serious difficulties completing the vehicle’s development, its manufacturing and its commercialisation.

[Lordstown’s] ability to continue as a going concern depends on its ability to complete the development of its electric vehicles, obtain regulatory approval, begin production at commercial scale and launch sales of those vehicles. The Company believes its current level of cash and cash equivalents is not sufficient to finance production at commercial scale and the launch of sales of those vehicles. These conditions raise substantial doubt about our ability to continue as a going concern. (Free translation)

Lordstown claimed that it had 527 million euros to meet this investment, but at the end of 2020 it reported losses of 125 million dollars. It is currently unable to afford the investment and wants to obtain financing to continue with its project. What is unclear is whether it will succeed.

This is the flip side of these companies that want to carve out a place in a very tough market, with established companies offering similar projects that enjoy greater public acceptance. It should be remembered that even Tesla has gone through quite difficult moments that came close to wiping the brand off the map, and that these newly born companies face a hostile and highly fragmented market.

Will this be the only company to admit its failure this year, or will it just be one more of those that fall shortly?