Lordstown, the deeply troubled electric vehicle (EV) startup, recently posted a sharp stock price drop. It traded at $0.81, which puts it firmly in the penny stock arena. Investors should not expect it to rebound.
Lordstown’s financial results were terrible. Regarding its numbers, Motley Fool editors wrote, “Yesterday’s (Tuesday) announcement confirmed that it only sold three trucks in Q4, generating revenue of just $194,000. Wall Street had expected sales would reach $7 million in the quarterly period.”
For the year (2022), Lordstown lost $282 million on revenue of $194,000. It boasted a cash balance of $221 million. Investors have to guess how long that will last. They must also guess whether Lordstown can get many vehicles into the market. It shuttered its assembly line on February 23 and cited “quality and performance” issues. When will those end?
Lordstown’s biggest problem goes beyond money. It is up against competition from many of the world’s largest car companies. Ford will eventually start mass production of its F-150 Lightning. Ford has a base of millions of customers who already own the gas-powered version of the truck. Popular pickups Silverado and Ram will also have EV versions soon. And Tesla plans to launch its pickup model. (This is the good, the bad and the ugly of owning a Ford F-150.)
Lordstown is one of a small group of EV companies in great trouble. Also on the list are Lucid and Rivian. Each may find that the number of vehicles it produces is too little too late. Although GM and Ford, for example, have struggled to get to market, they have huge production facilities, dealer networks, product development, and R&D operations.
The problems of EV companies are not new. In the 20th century, major brands, including Packard, Tucker and Delorean, disappeared. Each had a large following, but they could not get out from under the success of the large collections of brands that included Ford, Lincoln, Cadillac, Chevy, Pontiac, Buick and Oldsmobile. Lordstown finds itself in a similar situation. (These are EV companies likely to fold.)
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