What happened
Shares of electric vehicle manufacturer Lordstown Motors (RIDE -2.70%) jumped as much as 12.1% in trading on Wednesday after the company confirmed it's producing commercial vehicles. Shares closed the day within two cents of their high for the day.
So what
Yesterday, a spokesperson for Lordstown Motors confirmed the company has begun production on its Endurance pickup. The company had already planned to begin production this quarter with deliveries scheduled for the fourth quarter, but timelines often slip in the EV industry.
It has helped that the market was rising quickly today, with the Nasdaq Composite up 2.1% and oil prices increasing 4.4% for the day. EV stocks, and Lordstown in particular, are highly volatile so even an up day on the market can be great for these stocks.
Now what
Starting production is a big milestone for Lordstown, but keep in mind this is a company with a $434 million market cap, which doesn't leave it much ability to raise money if production hits a snag.
There's also a lot of competition in the market, particularly in electric trucks. Lordstown has outsourced manufacturing to Foxconn and had $236 million in cash as of the end of the second quarter, but that can be eaten up quickly if demand for trucks doesn't materialize. Given high interest rates and uncertainty for the economy, this isn't a stock I would jump in no matter how hot it is today.
