Today, Lordstown Motors (NASDAQ:RIDE) is not getting the love the overall market is receiving today. Indeed, investors in RIDE stock are down more than 14% at the time of writing.
Why the glum outlook?
Well, it appears a number of factors are at play with Lordstown motors of late.
Broadly speaking, SPACs and post-SPAC companies have been getting beaten up recently. The increasing valuations these speculative investments garnered earlier this year have come down to earth. Investors appear to be pricing in headwinds related to inflation and rising yields to a greater degree than we’ve seen in a while.
Additionally, Lordstown has been entangled in a rather messy ordeal with short sellers. In particular, Hindenburg Research chimed in on RIDE stock near its peak earlier this year. Since the short report was released, shares have tumbled sharply.
However, today, the company has another headwind investors are pricing in. Let’s take a closer look.
RIDE Stock Down Today on Shifting Competitive Landscape
Today, Ford (NYSE:F) unveiled its electric pickup truck, the F-150 Lightning. This product reveal has understandably picked up a lot of media attention today.
Shares of RIDE stock, as well as the stocks of other competitors in the heavy-duty EV space, are down sharply on the news. Why?
Well, Ford’s initial data suggest some pretty intense demand for its F-150 Lightning option. Additionally, if Ford is able to capture the lion’s share of the pickup market, companies like Lordstown may have a harder time breaking through with the growth it has promised investors.
Ford’s starting price of less than $40,000 before federal U.S. tax credits makes this a difficult product to compete against. Lordstown’s Endurance pickup is is priced much higher — at $52,500 before incentives. Accordingly, it appears investors may be discounting any early mover advantage Lordstown had prior to this announcement.
Indeed, the Ford F-150 continues to be one of the best-selling vehicles globally. Customers are familiar with this vehicle, and may be open to switching to an electric option. If Ford can beat the competition to market, Lordstown and its peers may have difficulty competing over the long term.
As a relatively new entrant to the pickup space, customers may simply choose to forgo a Lordstown purchase, and go with the incumbent. That’s not good for RIDE stock.
On the date of publication, Chris MacDonald 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.
