LORDSTOWN — Lordstown Motors Corp.’s flagship vehicle, the battery-powered Endurance pickup truck, is being manufactured, albeit at a slow rate and production estimates for 2022 are lower than previously predicted.

So far, a dozen of the first batch of 500 of the trucks have been built at Foxconn’s auto assembly plant in Lordstown, the company reported Tuesday in its third quarter financial results.

The company also announced it is making progress in the planning and predevelopment work on its next vehicle that will be co-created with Foxconn and on its Mobility in Harmony platform, an open EV development platform.

The initial batch of trucks is being limited to 500 because the cost to make the vehicle is greater than its expected selling price. Lordstown Motors has deferred investments in hard tooling, building scale with suppliers and other value-driven initiatives “to manage the balance sheet and limit the amount of new capital needed to achieve initial production targets,” according to the company.

“Production is expected to increase toward the end of the month as the remaining supplier part pedigree and availability issues are resolved. Approximately 30 commercial units of the first batch are estimated to be built by the end of 2022, with the remaining built in the first half of 2023,” the company states in a news release.

That’s down a bit, however, from what the company reported in late September when it announced the launch of commercial production. Then, Lordstown Motors expected to deliver 50 trucks to customers this year and up to 450 more in the first half of 2023.

Homologation, or whole-vehicle approval — needed to start shipping vehicles to customers — is expected for the truck sometime in the fourth quarter. Already, crash testing is complete and non-crash testing is ongoing, according to Lordstown Motors.

“As with any new vehicle launch, engineers will continue to drive and accumulate miles on test vehicles to find and resolve any potential issues and help ensure that we give our customers a great experience,” the release states.

The Endurance, along with Chevrolet’s Silverado ZR2 and Ford’s F-150 Lightning, are semifinalists for the North American Truck of the Year. The winner will be announced in January. Last month, about 30 auto journalists test drove the Endurance for its evaluation for the award.

“I am very proud of how far our capable, disciplined, resilient and collaborative LMC (Lordstown Motors Corp.) / Foxconn team has advanced this vehicle over the last year as we prepared for commercial production,” Edward Hightower, Lordstown Motors president / CEO, said.

INVESTMENT

On Monday, Lordstown Motors and Foxconn announced the global electronics and technology company has agreed to make an equity investment of up to $170 million into Lordstown Motors. It would be through $70 million in common stock and up to $100 million in newly created preferred stock.

Lordstown Motors will use the proceeds from the sale of the common stock “for general corporate purposes” and the proceeds from the sale of the preferred stock “to fund development and design activities” for a new EV Program with Foxconn, which replaces a previously announced joint venture to co-design electric vehicles.

Foxconn’s common stock purchase would be funded in two parts — about $22.7 million is expected to close Nov. 22 and about $47.3 million is subject to regulatory approvals, including clearance by the Committee on Foreign Investment in the United States.

The committee on foreign investment is part of the U.S. Treasury that reviews certain transactions involving foreign investment in the U.S. to determine their effect on national security.

The preferred stock investment also will be done in phases — the first $30 million will be funded after satisfying closing conditions at the same time with the closing of the $22.7 million in common stock while the remaining shares will be purchased based on achieving certain EV Program funding milestones.

“Foxconn’s additional investment in LMC is a strong sign of confidence in our team’s product development and engineering capabilities and will help accelerate the EV ambitions of both companies. We continue to believe that deep collaboration with Foxconn, as its preferred North American vehicle development partner, and Foxconn’s EV ecosystem, including MIH, is key to our company’s long-term success,” the release states.

The announcement, made after the market closed, caused the company’s stock to trade higher in after-hours trading. It opened trading Tuesday at $2.28 per share, but lost ground throughout the day to close at $1.75 per share.

THIRD QUARTER RESULTS

Lordstown Motors reported a third quarter operating loss of $154.8 million that included $121.1 million in non-cash charges, otherwise known as an accounting expense that does not involve a cash payment.

The loss includes $74.9 million in asset impairment, a $30 million accrual for historical litigation and a $16.2 million charge to reflect the net value of inventory.

An impaired asset is an asset that has a market value less than the value listed on a company’s balance sheet.

At the end of the quarter on Sept. 30, Lordstown Motors had $204 million cash and short-term investments on hand, or about $32 million lower than the second quarter. The change includes $49.6 million used for operations, including $8.6 million for working capital, $10.5 million in capital spending and $26.7 million in proceeds from equity issuances.