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Lordstown Motors (NASDAQ:RIDE), an American manufacturer of light-duty electric trucks, continues to provide business updates instead of the traditional quarterly earnings disclosure. As far as the utility for investors is concerned, this approach makes sense as Lordstown remains a pre-revenue company, precluding any substantial operational cash inflow.
As a refresher, Lordstown was launched in 2019 by Steve Burns, the former CEO of Workhorse. The company plans to manufacture its Endurance electric pickup truck at a refurbished General Motors (NYSE:GM) facility. The Endurance truck, carrying an MSRP of $52,500 before the application of $7,500 in tax credits, can tow a load of up to 7,500 pounds by utilizing motors attached to all four wheels of the vehicle. While production is expected to commence only in 2021, the company is aiming for an annual manufacturing capacity of 31,000 units by 2022. Recently, Lordstown closed its merger with the Special Purpose Acquisition Company (SPAC), DiamondPeak, paving the way for the shares of the combined company to start trading on the stock exchange under the ticker symbol RIDE.
This brings us to the crux of the matter. As per the press statement released by Lordstown today, the company has received around 50,000 pre-orders for the Endurance electric pickup truck from commercial fleets. Notably, the average order size per fleet is approximately 500 units. Moreover, the company remains on track to commence production in September 2021. Other important updates include:
- Lordstown is currently building and testing Alpha 2 prototypes of the Endurance truck, with the prototype volume expected to reach around 40 to 50 units eventually in order to facilitate crash, engineering, and validation testing.
- The company is planning to increase its current headcount of 250 individuals to 500 by 2020 and to 1,500 by the end of 2021.
- Lordstown Motors will officially open a satellite R&D center in Farmington Hills, Michigan, this week.
- The company will also open its first service center outside of Ohio later this month, intending to facilitate commercial users in the southern California region.
- Lordstown has initiated the construction of a 700,000 square foot facility in order to manufacture battery packs and hub motors. This facility will be situated within its 6.2 million square foot Ohio headquarters.
Investors appear to be taking a positive view of today’s business updates. As an illustration, Lordstown shares are up over 3 percent in pre-market trading currently. Year to date, the company’s shares have registered cumulative gains of over 79 percent. Readers should note though that the bulk of capital gains registered during the course of this year were driven by the DiamondPeak stock in the pre-merger phase.
Interestingly, the shares of Lordstown Motors and its counterpart, the Workhorse Group (NASDAQ:WKHS), often move in tandem. These synchronous moves are facilitated by the 10 percent stake that Workhorse retains in Lordstown. The two companies also share a number of synergies. As an illustration, Workhorse is expected to rely heavily on Lordstown’s technical expertise should it manage to secure a portion of the U.S. Postal Service’s (USPS) Next Generation Delivery Vehicle (NGDV) contract, meant to replace the aging fleet of USPS delivery vehicles. Expectations of Workhorse winning this contract has underpinned a substantial portion of the year-to-date rally in both stocks.
