Lordstown Still Takes a Beating

Cars and Drivers

Published: January 20, 2023 7:30 am

Lordstown Motors Corp. (NASDAQ: RIDE) management still believes it can compete in an electric vehicle (EV) world dominated by Tesla. Lordstown also operates in a universe where EVs will flood from every side, given the belief of huge automakers that electric engines are the wave of future. Many global manufacturers already have entered the EV market. Moreover, Tesla has started a price war that will add to its market share but drag down prices among its competitors. (Click here for the least appealing car brands to Americans.)
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Lordtown’s stock price has continued its plunge in the past three months. Over that period, it is off by 33%. Shaky investors who have been burned are unlikely to come back. At $1.13, it is a penny stock.

Lordstown recently announced that it expected slow production rates early this year because of supply chain problems. To be fair, this has been a problem for most car companies. However, others have balance sheets that will allow them to wait out the problem. Lordstown does not.

Lordstown has two headwinds to fight today. The first is that former CEO Steve Burns has been selling shares, contributing to downward pressure.

The other headwind is the growing success of the Ford F-150 Lightning. The F-150 is the top-selling vehicle in America, so it has an installed base of millions of current owners.

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Investors in companies that are likely to be doomed turn a blind eye to the writing on the wall. Hope overcomes logic. Lordstown is too small, too far behind the curve and too slow to release products to make it to the next level of the EV transformation of the car industry.

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