Automotive manufacturer Lordstown Motors (NASDAQ:RIDE) is making waves as the company works toward production of the first full-size, all-electric pickup truck for the commercial fleet market. It’s an ambitious objective, and you’ll probably want to share that vision if you plan on owning RIDE stock.
Sure, there are more famous names that you can hitch a ride with in the electric-vehicle space. Yet, I truly believe that there’s room for more electric vehicle manufacturers than just Tesla (NASDAQ:TSLA).
The idea is to identify a niche that Tesla might not be able to dominate. Since Lordstown Motors targets businesses that use commercial and municipal fleets, the company might be able to carve out its own unique domain among electric vehicle makers.
This is all very exciting, no doubt, but value-oriented investors might take issue with the price of RIDE stock. So, let’s begin there before we delve into what makes Lordstown Motors so special.
A Closer Look at RIDE Stock
Surely, you’ve noticed that there’s been a feeding frenzy for environmentally friendly automakers in the stock market. Commentators love to talk about Tesla stock, but nimble traders might actually find more opportunities with RIDE stock.
Interestingly, RIDE stock was stuck near $10 for more than a year before it took off like a rocket in August 2020. That’s because RIDE came into existence through a reverse merger with a special purpose acquisition company or SPAC.
Prior to the reverse merger, the trading community wasn’t particularly enthusiastic about the shell company, which was called DiamondPeak Holdings and traded under the ticker symbol DPHC.
Then investors found out that the merger would result in a unique electric-vehicle company, and the buying spree commenced. Not long afterward, RIDE stock shot up to $31.80.
After that, some profit taking took place and RIDE stock pulled back to the $13 area. There wasn’t really anything terribly wrong with the company, though, so well-timed traders bid RIDE back up to the $27 level, where it closed on Nov. 25.
The Key Question
Lordstown’s flagship vehicle is an all-electric pickup truck known as the Endurance. On the front page of Lordstown’s website, you’ll see how the Endurance compares favorably to Ford’s (NYSE:F) four-wheel-drive F-150 Lariat in terms of initial, fuel and maintenance costs.
On a more superficial level, it’s also just an awesome-looking truck. And speaking of awesome, Lordstown plans to produce the Endurance at its fully owned, 785-acre, 6.2 million-square-foot Lordstown Assembly Plant in (of course) Lordstown, Ohio.
That’s super cool, but will the Endurance sell? That, more than the size of the assembly plant or the look of the vehicle, is the key question for prospective investors of RIDE stock.
A Great Update for Lordstown Motors
Fortunately, a recent business update indicates that the Endurance could be a top seller in its niche. Impressively, Lordstown already received roughly 50,000 non-binding production reservations from commercial fleets for the Endurance.
Moreover, that number doesn’t convey the interest that Lordstown received from organizations that aren’t ready to place reservations. These could include federal, state and municipal governments as well as military fleets.
Nevertheless, prospective RIDE stock holders should be patient. Endurance deliveries are scheduled for September 2021. The start of full production is expected in 2022.
In anticipation of this, Lordstown plans to boost its internal head count to 500 workers by the end of this year. By the end of 2021, that figure should increase to 1,500 employees.
These are ambitious numbers for an electric truck start-up. Yet, if all goes according to plan, Lordstown could become the Tesla of its own specific sub-market.
The Bottom Line
Lordstown Motors certainly isn’t the first or most famous competitor in the electric-vehicle space.
Yet, it’s quite unique and visionary. So, for an investment with strong growth potential in a potentially disruptive automaker, grab a few shares of RIDE stock and just be patient with them.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.