In February, LMC stopped production on the Endurance Vehicle and recalled the newer EVs.
DB2
4 Likes
I suggested Foxconn backing away from the company had something of a smell of the PE model working: force Lordstown Motors into liquidation, than buy the intellectual property and tooling for a fraction of what it cost to develop. The pushback I received in an automotive group was that the Lordstown truck wasn’t very good anyway, so no-one would want it.
Steve
1 Like
It wouldn’t fit the PE model for other reasons. The biggest being the cutthroat competition among EV makers. And the fact that this is widely known across the investing community (and the banks and the folks who buy bonds). Even if they did have intellectual property that was worth something, the only way to use it is to burn billions and billions of dollars on a bet that you can sell enough cars to eventually recoup the investment. Nobody will supply billions in bonds anymore for that kind of endeavor. Hence, you see less debt financing and more equity financing in that sector. I suspect that Foxconn backed away because they weren’t convinced that Lordstown Motors could ever succeed. So why throw good money after bad with no confidence?
Well will find out “in the fullness of time”. The article says Lordstown is shopping their truck. What Foxconn does is contract manufacturing. Someone wants an EV pickup, on the cheap, in a hurry. Foxconn offers a turn-key solution, at a bargain basement price, because the development and tooling costs are already sunk, and the debt incurred discharged.
Steve
Lord’s Town is a Lazarus Miracle gone bad.
The Captain
1 Like
Most likely BS, Lordstown is over and done. There are 100+ EV startups, 90+ of them will fail over the next 5 years. They will fail, not because they don’t have good ideas, or even a somewhat good product, but because the capital to keep them going won’t be able to be easily found. The “big guys” will invest in the ones (EV) most likely to succeed.
1 Like