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Electric vehicle (EV) manufacturer Lordstown Motors (NASDAQ:RIDE) was mentioned on a number of financial media platforms but not for something positive. Indeed, onlookers might wonder whether there’s something fundamentally wrong with Lordstown’s electric pickup truck, which is called Endurance. Sorry to say it, but RIDE stock investors will need a great deal of endurance to ride out the volatility that’s likely in store.
At one point in time, it looked like Lordstown Motors was on a roll. The company commenced Endurance production in September and then started the first deliveries of that vehicle in November. Moreover, the Endurance full-size truck “achieved full homologation, a key condition to start sales.”
Fast forward to March of 2022, and it feels like the optimism surrounding Lordstown Motors is in the rearview mirror. In the final analysis, cautious investors should take note of Lordstown’s problems and pick another EV manufacturer to bet their hard-earned money on.
What’s Happening With RIDE Stock?
It’s particularly important for financial traders to monitor the RIDE stock price, which recently hovered near $1. Bear in mind, the Nasdaq exchange has sometimes been known to delist stocks that trade below $1 for too long. Therefore, it would be problematic if the Lordstown Motors share price falls below $1 and stays there.
Unfortunately, Lordstown’s loyal investors have experienced more than their fair share of disappointment. Consider, for example, that Lordstown Motors once projected sales of nearly 32,000 units for 2022. As it turned out, Lordstown only produced approximately 500 units last year.
Then, there’s been a potential conflict between Lordstown and fellow EV maker Workhorse (NASDAQ:WKHS). So, that’s another issue for investors to worry about. And of course, there’s the relentless competition from EV market giant Tesla (NASDAQ:TSLA) to consider.
Lordstown Motors Pauses Production and Delivery, Announces Recall
In case there wasn’t enough anxiety already, Lordstown Motors dropped a bombshell (or two, or three) with a recent press release. First of all, Lordstown “has experienced performance and quality issues with certain Endurance components.” The problems “may include part design modifications, retrofits, and software updates,” the company reported.
That’s certainly not a good start, and it only gets worse. Apparently, these issues have prompted Lordstown Motors to pause its vehicle production and deliveries to customers.
On top of all that, Lordstown filed paperwork with the National Highway Traffic Safety Administration (NHTSA) to recall the Endurance. Alarmingly, this was done “to address a specific electrical connection issue that could result in a loss of propulsion while driving.” Clearly, this isn’t a good look for Lordstown Motors as prospective customers might be concerned about life-threatening safety issues.
Don’t Expect a Comeback for RIDE Stock Anytime Soon
It’s not difficult to create a list of problems for Lordstown Motors. There’s fierce competition from Tesla and the possibility of an eventual delisting from the Nasdaq exchange.
Add the Endurance’s “performance and quality issues” to the list, and you’ve got a recipe for trouble. So, don’t assume that RIDE stock will recover this year, or at all, as Lordstown Motors has multiple issues that will be very difficult to overcome.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.