What happened

Shares of embattled electric-pickup start-up Lordstown Motors (RIDE -5.20%) were trading lower on Friday after a Wall Street analyst drastically cut his bank's price target for the stock following the company's earnings report on Wednesday.

As of 12:30 p.m. EDT, Lordstown's shares were down about 9.2%. 

So what

In a new note released on Thursday, RBC Capital analyst Joseph Spak cut his bank's price target from a pessimistic $5 to a dismal $1 while maintaining an underperform rating on the shares.

Spak noted that while the company said that it was on track to "begin production" of its Endurance electric pickup in September, it also said that it won't begin deliveries to customers until the second quarter of 2022. That means Lordstown's first-mover advantage is "all but dissipated," Spak wrote, given that giant Ford Motor Company plans to begin shipping its electric F-150 Lightning in the spring and General Motors is expected to follow with an electric Silverado pickup later in the year.

Spak thinks that Lordstown will need to raise "significant" capital to survive, and that "at least some [is] likely to be dilutive." He said that he can't recommend auto investors get involved with the stock "until a clearer strategic and financial picture emerge." 

A silver Lordstown Endurance prototype, an electric pickup designed for commercial fleets.

Will there be any buyers for Lordstown's electric Endurance pickup? There might be a few, one analyst wrote, but not enough to matter unless something big changes. Image source: Lordstown Motors.

Now what

Spak also wrote that he now forecasts Lordstown's annual deliveries peaking at just 7,500 in 2025. That's a tiny number. For context, 7,500 pickups is about three or four days' worth of Ford F-Series deliveries during normal times. 

If we generously assume an average selling price of $60,000 for Lordstown's trucks (the Endurance will start at $55,000), we're looking at about $450 million in revenue in 2025. That's not much for a company that has a market cap of more than twice that amount today. 

Long story short, I agree with Spak that unless something big changes -- soon -- it's very hard to see how this works out well for Lordstown's investors.