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NU RIDE INC. (RIDEQ)·Q4 2022 Earnings Summary

Executive Summary

  • Q4 2022 was defined by the start of Endurance commercial sales (three vehicles recognized) alongside a large cost-of-sales burden and non-cash charges; net sales were $0.19M and net loss was $(102.0)M, with cost of sales of $30.0M including a $21.1M inventory NRV charge and $8.3M depreciation .
  • Liquidity surprised positively: ending cash and short-term investments were $221.7M, ~34% above the high end of prior outlook; drivers included cost containment, ATM proceeds and capex timing; management guided to $150–$170M by end of Q1 2023 (ex any additional funding) .
  • Foxconn investment framework progressed (up to $170M; initial $52M funded), and pre-development on the next vehicle program continued with the MIH ecosystem—strategically important to the asset-light plan .
  • A key stock catalyst was the February 2023 disclosure of a production and delivery pause plus a voluntary recall (19 vehicles affected) to address quality issues—management expects to announce resumption timing after fixes, which could weigh on near-term sentiment until resolved .

What Went Well and What Went Wrong

  • What Went Well

    • Liquidity resilience: ending cash and short-term investments of $221.7M, roughly $57M above the high end of the prior outlook, aided by $13M cost containment, $12.4M ATM sales, capex timing, and working capital .
    • Strategic financing: Foxconn agreed to invest up to $170M (initial $52M funded in Nov-2022), with board representation rights; funds support new EV program with the Foxconn/MIH ecosystem .
    • Commercial launch milestone: full homologation achieved in November 2022 (EPA and CARB certification), enabling the start of Endurance deliveries in Q4 .

  • What Went Wrong

    • Quality and supplier issues: production and deliveries paused; voluntary recall filed to address an electrical connection issue, affecting 19 vehicles, with broader supplier quality/performance challenges limiting production .
    • Heavy cost-of-sales burden on tiny volumes: Q4 recognized sales of three vehicles versus $30.0M in cost of sales, including $21.1M NRV and $8.3M depreciation, driving a substantial gross loss .
    • Non-cash charges and operating losses: Q4 operating loss of $(104.1)M included $46.8M in non-cash charges (impairments/write-downs, accelerated stock comp), inventory charges, and depreciation startup .

Financial Results

Metric (USD)Q4 2021Q3 2022Q4 2022
Net Sales ($ Millions)$0.00 $0.00 $0.19
Cost of Sales ($ Millions)$0.00 $0.00 $30.02
Operating Loss ($ Millions)$(84.66) $(154.85) $(104.12)
Net Loss ($ Millions)$(81.15) $(154.43) $(102.00)
Diluted EPS ($)$(0.42) $(0.73) $(0.45)
SG&A ($ Millions)$25.89 $60.15 $22.17
R&D ($ Millions)$58.77 $19.84 $15.60
Cash + Short-term Investments (end of period, $ Millions)$244.02 cash; $0.00 STI (total ~$244.02) ~$204 (press release) $221.70

KPIs and notable Q4 items:

  • Vehicles sold (recognized in Q4): 3 units .
  • Vehicles completed or in process through Feb 2023: ~40; total vehicles sold to date: 6 .
  • Inventory NRV and other adjustments in Q4: $21.13M .
  • Depreciation in Q4 cost of sales: $8.26M .
  • Q4 SG&A detail: $22.2M, including $7.6M non-cash items and $1.2M litigation accrual .
  • Q4 R&D detail: $15.6M, with lower personnel/consulting vs prior year .

Context vs prior periods:

  • QoQ: Net loss improved to $(102.0)M from $(154.4)M on lower SG&A/R&D and lapping the $74.9M impairment and NRV/litigation in Q3; EPS improved to $(0.45) from $(0.73) .
  • YoY: Net loss widened vs $(81.2)M and EPS $(0.42) as 2022 included production start-up costs, NRV charges and depreciation onset .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance/UpdateChange
Cash & Short-term Investments (ending)FY 2022 vs ActualPrior: $150–$165M target at year-end (Q3 guide) Actual: $221.7M (34% above high end) Raised vs prior (actual beat)
Cash & Short-term Investments (ending)Q1 2023—$150–$170M (ex additional Foxconn funding, other equity or contingencies) New outlook
Endurance deliveries/productionInitial batchUp to 500 units; Q4 start of deliveries (Q3 guide) Production/deliveries paused; voluntary recall; resumption timing to be announced; plan remains initial batch up to 500 Lowered/paused timing; volume plan maintained
Opex (SG&A + R&D)Q1 2023 vs Q4 2022—Aggregate to decline slightly QoQ ex accelerated stock comp, litigation accruals, write-downs (R&D modestly up; SG&A down) New qualitative guide

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2022)Trend
Supply chain, quality, launchQ2: targeting Q3 start of commercial production; BOM cost > ASP, constrained ramp; Q3: slow production start; awaiting full homologation; NRV and impairment charges; seeking OEM partner Production/delivery pause; voluntary recall; supplier quality/performance issues; corrective actions underway Deteriorated near-term; remediation in progress
Regulatory/certificationQ3: expected full homologation later in quarter Full homologation achieved; EPA/CARB certifications received Improved (milestone achieved)
Foxconn partnership/financingQ2: APA closed; CMA; JV planning; Q3: up to $170M additional investment announced $52M initial funding closed; up to $170M framework; pre-development with MIH; expected board designees Structurally improving; execution ongoing
Liquidity runwayQ2: cash $236M; lowering 2H opex/capex plans YE cash+STI $221.7M, 34% above outlook; Q1 guide $150–$170M (ex new funding) Better than expected YE; sequential draw expected
Product performance/customer feedbackQ3: >30 journalists drove Endurance; positive initial feedback, NACTOY semi-finalist Q4 sales started; display with fleet accessories; service network agreement announced Steady progress; tempered by quality fixes
Legal/regulatory riskQ3: $30M litigation accrual $1.2M litigation accrual in Q4 SG&A Lower accrual magnitude in Q4

Management Commentary

  • “Our asset-light business model and collaboration with the Foxconn EV ecosystem, including MIH, will provide the opportunity for Lordstown Motors to create winning EVs... while gaining the cost benefits of scale.” — Edward Hightower, CEO & President .
  • “We began commercial sales of our Endurance... [and] decided to temporarily pause production... [and] filed paperwork with NHTSA to voluntarily recall the Endurance to address supplier quality issues.” .
  • “I am very proud of the Lordstown Motors and Foxconn EV Ohio team... We are very excited to start delivering vehicles to our commercial fleet customers.” — Edward Hightower (Full homologation press release) .
  • “We... have experienced performance and quality issues... [and] filed... a voluntary recall... The recall will affect 19 vehicles... Lordstown is working with its supplier network to implement a corrective action.” — Edward Hightower .

Q&A Highlights

  • Lordstown held its Q4/FY22 call on March 6, 2023 at 8:30 a.m. ET, but the full transcript was not available via the document system used for this analysis; as a result, Q&A specifics cannot be cited here .
  • Based on 8-K disclosures, management emphasized the production pause and recall scope, corrective actions with suppliers, and liquidity planning, with a commitment to update on resumption timing after remediation .

Estimates Context

  • S&P Global (Capital IQ) consensus for Q4 2022 EPS and revenue was unavailable for this ticker due to a mapping issue (GetEstimates failed to return data). As a result, comparisons vs. Wall Street estimates could not be provided through S&P Global for this quarter.
  • Implication: With no published consensus in our source, estimate revisions will likely key off management’s operational updates (recall/timing to resume production), cash trajectory, and Foxconn funding milestones .

Key Takeaways for Investors

  • Liquidity upside was a notable surprise: YE22 cash+STI at $221.7M was ~34% above prior outlook, providing more time to resolve quality issues and navigate early launch costs .
  • The near-term narrative hinges on execution of corrective actions and the timing of production/delivery resumption; voluntary recall (19 vehicles) underscores launch risk but is limited in unit scope so far .
  • Unit economics remain pressured: tiny Q4 volumes (3 vehicles) against $30.0M cost of sales (including $21.1M NRV, $8.3M depreciation) highlight the importance of scale, BOM cost reduction, and/or strategic partner support to enable viable production .
  • The Foxconn relationship continues to be the strategic linchpin—capital, manufacturing, and MIH co-development; progress on the up to $170M investment and EV program milestones is a medium-term value driver .
  • Operating discipline is visible: substantial YoY and QoQ reductions in SG&A and R&D and removal of large Q3 non-cash charges helped narrow losses in Q4 despite start-up burdens .
  • Watch for Q1 2023 cash to step down to $150–$170M absent new funding; additional capital and/or completion of Foxconn tranches are likely prerequisites for scaling Endurance and the next program .
  • Stock reaction catalysts: announcements on production resumption timing, recall remediation progress, Foxconn closing milestones/board appointments, and any concrete evidence of improved supplier quality and sustained deliveries .

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