A day after ousting two top executives, electric truck startup Lordstown Motors said on Tuesday that it will start production in September even if it doesn’t raise more capital, in contrast. with what they told stock managers just a week ago.
In a filing with the Securities and Exchange Commission last week, Lordstown said it needed to raise more money and would probably not survive. Then, on Monday, the company’s founder and chief executive officer, Steve Burns, and the company’s chief financial officer resigned.
But during a press conference held by the Detroit-based Automotive Press Association, the company’s new executive team presented a much more upbeat outlook without providing many details.
Lordstown’s chairman, Rich Schmidt, said that the company will start making trucks at its plant in Lordstown, Ohio, by the end of September and that they have enough money to last through May 2022. will be able to produce about 15,000 trucks. next 24 months.
He also said the company is still actively looking for new funding to increase production.
“It’s a new day at Lordstown Motors, which has not and will not disrupt our plans to start production,” said the company’s new executive chairman, Angela Strand. She has previously served as the principal independent director on Lordstown’s board of directors.
Shares of Lordstown rose to nearly $31 per share earlier this year, but fell to around $7 in May, after Mr Burns acknowledged that thousands of “pre-orders” the company had placed offered are not binding orders. Some of the large orders the company announced have also come from “influencers” who don’t plan to buy the trucks themselves, the company said Monday.
Mr Schmidt, who joined Lordstown in 2019 after a stint at Tesla, said on Tuesday the company has “binding” orders for all the trucks it is capable of producing. production in 2021 and 2022. But he declined to disclose the total, name specific customers or say whether they had paid a deposit to secure his order.
“Those are firm orders,” Mr. Schmidt said. “They were reconfirmed last week.”
Shares of Lordstown rose more than 10% on Tuesday.
He said production will begin in September even though the company’s Endurance truck has not yet passed all the necessary engineering and crash tests to be sold in the United States. The trucks leaving the company’s assembly line will be kept until testing is complete and then modified, if necessary, before being shipped to customers, a highly unusual practice. in the automotive industry.
Mr Schmidt provided few details on what prompted Mr Burns’ departure. About a dozen other senior executives were also let go on Monday.
Lordstown gained attention in 2019 when it agreed to buy a plant that General Motors was closing. The closure drew scorn from President Donald J. Trump, and GM sold the plant to Lordstown for just $20 million. Mr. Trump later hosted Mr. Burns at the White House.
Lordstown plans to produce a solid, electric pickup truck for commercial customers like mining and construction businesses. Mr. Burns had hoped the company would become the Tesla of the pickup truck market. But investors grew increasingly concerned about Lordstown’s prospects after a small investment firm, Hindenburg Research, released a report in March that raised questions about the company’s interest in trucks.