Should investors consider purchasing Lordstown Motors stock, given its recent significant decline?
**Electric Vehicle Producers Face Challenges: Lucid Group and Lordstown Motors Fall Short of Production Targets**
In the rapidly evolving world of electric vehicle production, two start-ups, Lucid Group and Lordstown Motors, have faced significant hurdles in meeting their production and revenue forecasts.
**Lucid Group** initially aimed to deliver 20,000 vehicles in 2022 and 49,000 in 2023. However, the company delivered only 4,369 vehicles in 2022, significantly below the forecast, and 6,001 vehicles in 2023, also far from the initial target. These underperformance issues have led to lower-than-expected revenues for Lucid Group.
On the other hand, **Lordstown Motors** did not publicly specify precise delivery forecasts for 2022 and 2023. The company faced financial difficulties and production setbacks, leading to limited vehicle deliveries in early 2022. In May 2022, Lordstown sold its Ohio plant to Foxconn for $230 million, intending to continue limited production with Foxconn’s support. However, ongoing financial challenges led to the company's bankruptcy in June 2023, ceasing production and failing to achieve meaningful commercial output.
The table below provides a direct comparison of the production forecasts and actual results for both companies:
| Company | 2022 Forecast (Deliveries) | 2022 Actual (Deliveries) | 2023 Forecast (Deliveries) | 2023 Actual (Deliveries) | Revenue Status (2022–2023) | |--------------------|---------------------------|--------------------------|----------------------------|--------------------------|-------------------------------------| | Lucid Group | 20,000 | 4,369 | 49,000 | 6,001 | Low revenue, far below forecasts | | Lordstown Motors | Not specified | Few if any | Not specified | Minimal before bankruptcy| Negligible, bankruptcy in 2023 |
Investors may still be considering buying Lordstown Motors stock, as the company has replaced its CEO and CFO and is working to finalize the arrangement with Foxconn for contract production of the Endurance pickup truck and future models. However, with a market capitalization currently below $500 million and limited revenue expected through 2023, it is likely that investors would be better allocating their capital elsewhere.
[1] Source: Lucid Group Q1 2022 Shareholder Letter [2] Source: Lucid Group Q2 2022 Shareholder Letter [3] Source: Lordstown Motors Q4 2021 and Full-Year 2021 Financial Report
In the realm of technology-driven electric vehicle production, the investment landscape for Lucid Group and Lordstown Motors has been fraught with challenges. Despite initial targets of delivering 20,000 Lucid vehicles in 2022 and 49,000 in 2023, the company delivered just 4,369 in 2022 and 6,001 in 2023, resulting in lower-than-expected revenues. Lordstown Motors, on the other hand, faced financial turmoil and failed to meet its unspecified production targets for 2022, leading to bankruptcy in 2023.
Despite potential changes in leadership and planned collaborations, the low revenue projected for Lordstown Motors through 2023 suggests that it might be prudent for investors to reconsider their investing options in the company. Given the market capitalization currently hovering below $500 million for Lordstown Motors, it seems wise for investors to allocate their capital elsewhere in the rapidly evolving world of electric vehicle finance and investing.
