Lordstown Motors Executives Address Orders After CEO & CFO Resign

Lordstown Motors Secures Funding Through May 2022

Lordstown Motors has confirmed possessing sufficient binding orders from customers to facilitate a constrained production run of its electric pickup truck until May of 2022. This announcement was made by company executives on Tuesday, following a recent leadership transition that included the resignations of both the CEO and CFO.

Production Focus and Project Adjustments

Achieving this production milestone necessitates a focused allocation of resources. Consequently, the company is dedicating all available capital to the Endurance pickup truck. Other planned initiatives, such as the development of an electric recreational van, have been temporarily suspended, as stated by interim CEO Angela Strand and President Rich Schmidt during a press event.

Schmidt emphasized the company’s current priority, stating that the focus for the next three months is to meet production targets, adhere to budgetary constraints, and prepare the vehicles for market release.

Electric Van Project Delayed

The unveiling of what was intended to be the “first mass-produced all-electric RV” has been postponed. Due to financial challenges, Lordstown has delayed the reveal and removed all references to the van from its latest annual filing, a change initially observed earlier this month by the Wall Street Journal.

Investor Response and Stock Performance

Investors reacted positively to the news regarding the company’s capital reserves and binding orders. The announcement that the electric van project was being delayed received less attention. As a result, shares of Lordstown Motors increased by 11.34% to close at $10.31.

Financial Concerns and Scrutiny

Lordstown’s first-quarter report, filed with the SEC, revealed a concerning lack of capital, potentially hindering the manufacturing and delivery of the EV pickup. The filing included a warning to investors about “substantial doubt” regarding the company’s ability to continue operations for the next year.

The automaker has previously faced criticism following a report by Hindenburg Research, which alleged that the company had provided misleading information to consumers and investors concerning the number of Endurance preorders.

A "New Day" and Future Outlook

Strand characterized Tuesday as a “new day” for the company. Schmidt affirmed that the company holds enough orders to support limited Endurance production throughout 2021 and 2022, describing these orders as both “firm” and “binding.”

The starting price for the work truck is set at $55,000. For comparison, the Ford F-150 Lightning, another electric pickup targeting commercial customers, will begin at a price point below $40,000.

Capital Requirements and Funding Efforts

While the company currently has $400 million in cash reserves, Schmidt indicated that additional funding would be required to expand production capacity beyond 20,000 vehicles annually. Lordstown is actively pursuing additional capital from General Motors (GM), which holds a minority stake in the startup, as well as other initial investors.

GM released a statement to Reuters, expressing satisfaction with its existing relationship with Lordstown Motors but remaining open to considering proposals that would be mutually beneficial.