What happened
Lordstown Motors (RIDE 5.56%) stock rode high on a weak market day today -- shares of the electric vehicle (EV) company were trading 4.9% higher as of 1:15 p.m. ET on Monday.
The beleaguered company is trying hard to find a footing in the highly competitive EV industry. It started commercial production of its all-electric Endurance pickup trucks only this September after launching in 2020 with a big -- but failed -- production target for 2021. A popular automotive magazine has now come out with its first test results of the Endurance pickup just days ahead of Lordstown Motors' earnings release, giving investors a reason to turn hopeful about the EV stock.
OTC: RIDE
Key Data Points
So what
The company reportedly provided a couple of Endurance pickups for testing on the road, and after its first driving tests, Car and Driver sees promise in the truck. Although the automotive magazine believes the Endurance trucks need some final tweaks, it sees the vehicle "approaching readiness for fleet-truck use." Endurance is a light-duty commercial fleet truck with a range of 200 miles.
To be fair, Car and Driver didn't say much about Endurance, but any stamp of approval right now, even small, is enough to lift the hopes of investors in the EV maker as it tries to finally bring its long-due EVs into the market.
Now what
Lordstown Motors has had a tumultuous ride since it was founded in 2018, with the EV maker eventually roping in Hon Hai Precision, better known as Foxconn, as its contract manufacturer earlier this year. Foxconn bought Lordstown's only plant in Ohio and is manufacturing the Endurance alongside its own branded trucks. The companies now aim to build 500 trucks and sell 50 units this year.
Lordstown, though, has landed itself in a liquidity crunch and is burning through cash rapidly. It will likely require to raise additional capital to build those 500 trucks. Moreover, Endurance will enter an EV market that already has Ford's hot-selling F-150 Lightning pickups and Rivian's R1T electric pickup trucks.
Yet, investors today are paying little heed to Lordstown Motors' persistent challenges and betting on the penny stock. Now that the company has started EV production, investors expect to hear some good things from the company when it reports its third-quarter earnings on Nov. 8.
