Don’t Count Lordstown Motors Among Your EV Stocks to Buy

Lordstown Motors (NASDAQ:RIDE) was one of the hottest EV stocks in 2020. In one six-week period, RIDE stock surged 183%. However, the ride got rocky last fall and in 2021, investors have had to endure heavy loses. With its latest drop, RIDE closed at $4.89. Now shares are at an all-time low.

A magnifying glass zooms in on the website for Lordstown Motors (RIDE).

Source: Postmodern Studio /

There are some whose ears may perk up at this prospect. A former rising star EV maker — with a highly anticipated electric pickup truck that had put in a 2020 appearance at the White House no less — going for bargain prices? 

That may sound tempting, but I would resist the temptation. Lordstown Motors had potential a year ago. However, the EV race has gotten a lot more serious since then. More companies are planning to release EV pickup trucks and one is already in production.

At this point, the company is clearly struggling. Reflecting its woes, RIDE stock is down 75% so far in 2021. This Portfolio Grader F-rated stock is best avoided.

Here’s a deeper look at why it shouldn’t be on your list of stocks to buy.

RIDE Stock Overview

We are in the early stages of a golden era for EVs. The government is prepared to throw money at building supporting infrastructure like charging stations. A new generation of EVs offers extended range, and more affordable prices. Climate change is steering consumer choice like never before and that makes EVs even more desirable. Gas prices are climbing again, helping to push even pragmatic car buyers toward the EV option. 

EV stocks have been hot over the past year, and RIDE stock was right up there.

In the U.S. market, pickup trucks and SUVs outsell passenger cars by a three-to-one margin. That has made an electric pickup truck something of a Holy Grail for the industry. 

Last June, EV startup Lordstown Motors announced the Endurance. The company claimed it would be the first electric pickup truck on the market.

The Endurance was priced at $52,000 and offered a 250 mile range. With a claimed 20,000 pre-orders and letters of intent, Lordstown said the Endurance would start rolling off its Ohio production line in July 2021. The company even had an Endurance prototype on display at the White House for a photo op with President Trump.

Of course, RIDE stock took off!

Lordstown’s Founder and CEO Resigns

However, the Lordstown story has been much darker in 2021. In June, it was revealed that those tens of thousands of Endurance pre-orders Lordstown cited last June were non-binding. The company said it lacked the money to start mass production and told regulators it may not survive.

The company’s founder and CEO resigned amid an Securities and Exchange Commission investigation. The company continued to assure customers and investors that the Endurance would go into production in September. 

Lordstown Suffers More Bad Omens

At the end of September, there was still no sign of Endurance production. In fact, the only EV pickup truck in production belongs to a rival — Lordstown lost its first-to-market advantage.

On Sept. 30, Lordstown Motors announced it was selling its Ohio assembly plant for $230 million. The buyer is Taiwan’s Foxconn — yes, that Foxconn. The deal includes provisions for Foxconn to manufacture the Endurance (along with EVs from competing companies) in Ohio. And the cash keeps Lordstown alive for now.

RIDE stock popped on that news, closing just below the $8 level, but it quickly resumed its slump.

The Bottom Line on RIDE Stock

This is an exciting time for the auto industry and EVs in general. Investors have caught that excitement and driven EV stocks to levels unthinkable just two years ago. The problem is that not all these EV makers are going to succeed.

In fact, I would go so far as to predict that most of them won’t. There’s already one huge player that dominates the industry, and traditional auto makers are rapidly catching up. There are only so many EV buyers to attract, and auto making is one of those industries that requires massive scale to succeed. 

It seems unlikely at this point that Lordstown Motors is going to come out of this as one of the EV winners. The auto industry is full of companies that had promise, but ultimately failed. Names like Studebaker, DeLorean and American Motors Corporation. 

If Lordstown Motors joins that club, RIDE shares will be worthless. Even as cheap as it is, RIDE stock just isn’t worth the gamble.

If you want to invest in EV makers that have decent shot of still being here in 5 years, here’s a list you can review. But I wouldn’t bet on a company with the stigma of exaggerated pre-orders, let alone one that has yet to actually produce a vehicle. Oh and to put more ugly on top of it all, don’t forget that it just sold its factory for the necessary cash to survive a while longer. All of that pains a glum picture for RIDE stock moving forward.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (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 Publishing Guidelines.

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