Month: May 2023

Lordstown Motors had cash and cash equivalents of $108.1 million as of March 31, down from $203.6 million a year earlier.

Shares were little changed, having hit a record low of 25 cents on Monday.

Lordstown Motors and its EV peers have been struggling as access to capital tightens from rising interest rates and mounting economic uncertainty.

The company had resumed production of Endurance in March after a pause in February to address quality issues.

It said in February that it had made only 37 trucks for sale and recalled 19 vehicles delivered to customers or being used internally.

Net loss ballooned to $171.1 million in the quarter ended March 31, the company said on Thursday, from $89.6 million a year earlier.

Lordstown Motors had previously warned of substantial doubt about its ability to continue as a going concern, citing liquidity issues.

While the company increased its sales and earnings projections for the full year, its first-quarter profit results came in just shy of Wall Street expectations, due to inflated costs, high R&D spending on electrification and sagging sales in China, which is also hurting other suppliers with high exposure to the Far East.

“We outperformed the market both in Europe and North America,” CEO Frederic Lissalde said on a call with investment analysts. “As we expected going into the quarter, our margin performance was negatively impacted by our planned e-R&D investment, net inflationary costs and the impact of low production in China.”

BorgWarner, known for its turbochargers, has been working the last few years to shed ties to the internal combustion engine and recast itself as a leading supplier of inverters, batteries and other EV components. To that end, the spin-off of its fuel systems and aftermarket segments — to be renamed Phinia — is expected to be complete by the end of the third quarter.

The supplier expects EV-related sales in 2023 to double from last year with between $1.5 billion and $1.8 billion in revenue.

Its adjusted net earnings were $1.09 per diluted share, 2 cents off analysts’ mark.

BorgWarner shares (NYSE: BWA) slipped 7.9 percent to close at $42.80 on Thursday.

The company generated $278 million of capital expenditures for the quarter, compared with $177 million the year prior, according to its 8-K quarterly report to the Securities and Exchange Commission.

In addition to R&D expenditure and the sluggish performance of one of its primary markets, increased costs dragged down the bottom line. BorgWarner reported about $28 million of inflationary costs in the first quarter and said it expects a $65 million costs headwind for the full year.

On its path to generate $4 billion of EV sales by 2025, BorgWarner has made significant capital expenses related to its EV business in the past few months. In April, it announced a $42 million expansion of its Seneca, S.C., battery plant., and a month before that, the company said it would invest $20.6 million and create 186 jobs in metro Detroit.

BorgWarner, based in suburban Detroit, is projecting full-year sales of between $17.1 billion and $17.9 billion, slightly higher than its prior guidance and up from the $15.8 billion it made in 2022.

An image of the upcoming Toyota pickup, believed to be the Tacoma, leaked in January from Brazil.

Through April, Tacoma sales in the U.S. are up 5.7 percent this year to 75,037.

The Tacoma continues to dominate its six competitors in the midsize pickup segment, commanding 42.3 percent market share in the first quarter of 2023, up from 39 percent for all of 2022, when it accounted for 237,323 sales. Last year, the Tacoma was the brand’s third-bestselling nameplate in the U.S., trailing only the RAV4 compact crossover and Camry midsize sedan.

Four potential strategies for moving forward were identified in the report: divest from combustion parts and shift to EV production; commit to combustion engine supplies and simultaneously prepare for closure; move to assert dominance as a particular parts supplier; or position to be acquired.

Suppliers whose components do not have a strong aftermarket focus will be particularly vulnerable, Robinet said. Small firms are also at a higher risk for disruption, and many are facing the decision over whether to take on the costs associated with rebuilding their businesses to meet an electrified future.

Responses will need to vary widely from situation to situation, Robinet emphasized. How much renewal interest there is for components is a factor that will impact suppliers’ flexibility, mobility and opportunities, he said.

Overall, though, urgency is key, as “the options become more and more limited over time.”

While Robinet believes it is time to understand an EV transition as a “when” instead of an “if,” he urged suppliers to be calculated in their adaptation.

“With EVs, everything is new — new processes, sometimes a new plant, new suppliers, new components,” Robinet said. “And anytime anything is new, there’s also going to be a certain level of risk.”

The project was announced Wednesday by Nel CEO Håkon Volldal, Michigan Gov. Gretchen Whitmer, U.S. Commerce Secretary Gina Raimondo, and state and local economic development officials attending the SelectUSA Investment Summit in Maryland.

“The choice of Michigan is based on an overall assessment of what the state can offer in terms of financial incentives, access to a highly skilled workforce, and cooperation with universities, research institutions and strategic partners,” Volidal said in a statement in which he also highlighted “personal engagement from the governor and her team.”

Another factor was the proximity to GM, headquartered in Detroit.

The announcement came months after Whitmer met with Nel executives during a trade mission to Norway and Switzerland. She said she was “thrilled” to land the plant over other states, boosting efforts to grow Michigan’s car, microchip and clean energy industries.

“As a major player in all three of these sectors, Michigan is serious about leading hydrogen development and winning today’s investment proves that the best manufacturing in the world happens right here in Michigan,” Whitmer said in a statement.

No information was released about the incentives package, when the factory will open and whether it will be newly built or located in an existing facility.

It will grow in steps to match supply with demand, according to the Michigan Economic Development Corp., which said there will be a “critical need” for U.S.-manufactured electrolyzers.

Nel specializes in electrolyzer technology. Electrolysis, the process of using electricity to split water into hydrogen and oxygen with an electrolyzer device, is a promising option for carbon-free hydrogen production from renewable and nuclear resources, according to the U.S. Department of Energy.

In November, Nel and GM announced an agreement to help accelerate the industrialization of Nel’s proton exchange membrane (PEM) electrolyzer platform. The companies are looking to enable more cost-competitive sources of renewable hydrogen.

Michigan last month committed its support for two clean-hydrogen hub projects that are vying for a share of $7 billion in federal funding. The funds, which are part of the 2021 Bipartisan Infrastructure Law, will help to establish six to 10 regional “H2Hubs” to speed the use of hydrogen to deliver or store large amounts of energy.

“We are grateful for the ongoing legislative support of economic development programs that supported this opportunity,” MEDC CEO Quentin Messer Jr. said.

While officials did not indicate which locations Nel is evaluating, Detroit Regional Partnership President and CEO Maureen Donohue Krauss attended the news conference and said attracting a “global innovator” in hydrogen technology “speaks volumes about the talent and advanced manufacturing in our region.”

Porsche reaffirmed its targets for 2023 of hitting a return on sales of 17 percent to 19 percent on revenue of 40 to 42 billion euros ($44.1-$48.5 billion). Porsche said its return on carmaking was 18.2 percent in the first quarter.

Operating profit in its financial services arm declined to 86 million euros from 102 million previously, which it attributed to the valuation of interest rate hedges and derivatives as well as the impact of the interest rate rise on financing products.

The maker of the 911 sports car, which remains majority owned by parent Volkswagen Group since last year’s listing, is targeting a move further upmarket to battle Ferrari.

Porsche is planning an all-electric high-performance crossover above its Cayenne, slated for around 2026, as part of a plan to boost operating margins to more than 20 percent.

Bloomberg contributed to this report