US electric vehicle startup Lordstown Motors has found itself in more strife as both its CEO and CFO have resigned and confusion reigns over when it’ll begin production.
Both CEO Steve Burns and CFO Julio Rodriguez resigned from their roles at Lordstown on Monday, June 14 after allegations surfaced about pre-orders for the Endurance electric pick-up truck.
Despite the resignations, Angela Strand, newly appointed chairwoman for the brand, said the day after the executives resigned that “it’s a new day at Lordstown and there are no disruptions, and there will be no disruptions, to our day-to-day operations”.
On the same day, company president Rick Schmidt said at an Associated Press event the company had enough binding orders to continue into 2022.
But the company has admitted to the US Securities and Exchange Commission (SEC) that the levels of funding were not sufficient to fund commercial scale production, and by Thursday it conceded it didn’t have any binding purchase orders or commitments from customers.
“Although these vehicle purchase agreements provide us with a significant indicator of demand for the Endurance, these agreements do not represent binding purchase orders or other firm purchase commitments,” the company said in a filing with the SEC.
The company had touted 80,000 pre-orders as recently as December 2020.
Lordstown also stated to the SEC that there was “substantial doubt regarding our ability to continue as a going concern one year from the date these financial statements are issued.”
The startup was already the subject of a SEC probe before a research firm, Hindenburg Research, alleged some orders from interested parties for the Endurance “appear too vague or infirm to be appropriately included in the total number of pre-orders disclosed”.
Former Lordstown CEO Steve Burns said last week that without funding, the company could only make half the vehicles that were expected.
But according to CNBC, executives from the company said that Lordstown has enough funding and remains on track to begin production of the Endurance in late September – the opposite of what the company originally claimed.
The company was also set to produce an electric van but the plug has been pulled in order to focus on the Endurance.
Lordstown was founded in 2019 and raised US$675 million last year when it became a publicly listed company.
General Motors was one of the startup’s biggest investors, committing US$25 million in cash and $50 million in other contributions after selling the eponymous Lordstown, Ohio plant to the startup.
The Lordstown Endurance remains an interesting prospect, with four-hub electric motors producing at least 447kW of power. It will have a range of at least 400km.
It’s been targeted at commercial buyers, though it now faces intense competition from pickup truck market leader Ford.
The Blue Oval brand has revealed its all-electric F-150 Lightning, which also includes a fleet-focused Pro variant starting at US$39,974 (A$52,941) before any government incentives.
That undercuts the Endurance, which Lordstown is expecting to start at US$52,500 (A$69,531) before incentives.
Hindenburg Research’s allegations against Lordstown follow allegations it made about another EV start-up earlier in 2021, Nikola.
The firm alleged Nikola was misleading investors, which led to its founder stepping down and General Motors pulling its investment in the startup.
