What happened
Lordstown Motors (RIDE +5.59%) shares continued to rebound today after a sharp drop on Monday. The two-day move higher may not satisfy owners of the stock who have held on through its more than 50% decline year to date, but there may be more positive news for them coming soon. Today, the stock traded near the day's highs up 5.8% as of 3:35 p.m. ET.
OTC: RIDE
Key Data Points
So what
Lordstown announced that production of its electric Endurance pickup truck began at the end of September after a troubling early history. Another electric vehicle (EV) start-up offered some encouraging news today, and some investors may be getting more optimistic about Lordstown's future because of it.
Image source: Lordstown Motors.
Now what
Several early-stage EV companies have been facing headwinds trying to ramp up initial production. Lucid Group -- a maker of luxury electric sedans -- has lowered its 2022 vehicle production estimate twice this year, but today it came out with some more positive news. Lucid said it believes it is finally on track to hit its latest production target for 2022 after producing nearly 2,300 electric cars in the third quarter.
Lordstown had been struggling since June 2021, even prior to initiating commercial production, when Steve Burns resigned as CEO and from Lordstown's board of directors amid accusations of overstating pre-order data for the Endurance truck. It then reached an agreement for electronics contract manufacturer Foxconn to purchase Lordstown's manufacturing facility in Ohio for $230 million. Foxconn is now manufacturing the Endurance and the two companies plan to collaborate on new model designs in the future.
Investors likely hope Lordstown, like Lucid, is also able to meet its targets now that production has begun. But they should also note that the company expected to end the third quarter with less than $200 million in cash. It will likely need to find new injections of capital, and the stock might react negatively to more details of its cash and capital plans.
