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Lordstown Motors EV Pickup Startup Going Public With $1.6 Billion Valuation

Illustration for article titled Lordstown Motors EV Pickup Startup Going Public With $1.6 Billion Valuation
Photo: Lordstown Motors / Edited by Jalopnik
The Morning ShiftAll your daily car news in one convenient place. Isn't your time more important?

Lordstown Motors, the electric vehicle startup I’m not even sure has a functioning pickup yet, has been valued at $1.6 billion, Ferrari growth takes a hit, and more in The Morning Shift for Monday, August 3, 2020.

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1st Gear: Who And How Much?

The startup car company that no longer talks about the weird helicopter it showed off just a few years ago, Lordstown Motors, has moved into its Lordstown, Ohio plant purchased from General Motors and shown some ideas of what it plans to build there.

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The free market of ideas has now valued this particular idea of a commercial full-sized all-electric pickup from out of nowhere called the Endurance at $1.6 billion in a new deal to go public, Reuters reports:

Lordstown Motors has agreed to go public through a merger with blank-check company DiamondPeak Holdings in a deal that values the electric pickup truck start-up at pro forma equity value of $1.6 billion, the companies said on Monday.

The combined company will be called Lordstown Motors Corp following the closure of the deal in the fourth quarter and will trade on the Nasdaq under the ticker symbol “RIDE”, the companies said.

A blank-check company is a shell company that raises money through an initial public offering to buy an operating entity, typically within two years.

Other EV startups, including Fisker Inc., which recently failed to secure Volkswagen as a powertrain supplier as planned, and Nikola also both were snapped up by one of these market shark blank-check shell companies. I wonder if there’s a shell company out there with $1.6 billion that may be interested in a car website?

2nd Gear: Two Years Later, A Dent In Chinese Imports

Over two years after President Trump introduced new tariffs against Chinese imports in an effort to stimulate American and North American based manufacturing, it may have finally had some impact thanks to the global pandemic.

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That is, if the only goal was to move manufacturing out of China, with no real regard to what it would take or how much it could cost.

Anyway, with the tariffs, a new North American trade agreement with Mexico and the U.S., and now the Covid-19 epidemic, Chinese trade has finally taken a hit, Auto News reports:

U.S. auto parts imports from China dropped by nearly a fourth last year to $15.3 billion, according to the U.S. Department of Commerce. During the same period, U.S. parts imports from South Korea grew nearly 10 percent to $9.1 billion, while parts imports from Thailand jumped almost 23 percent to $4.3 billion.

U.S. imports from Mexico, meanwhile, grew 3 percent to $61.6 billion last year.

Imports of parts from China have been further reduced this year by the widespread disruption caused by the pandemic.

“Redesigning the supply chain is something companies in general are looking at, even if it’s not bringing everything back to the U.S.,” Blackhurst said. “You’re going to see some companies re-looking at where they source from, but it’s not easy to flip a switch and just have that happen.

“We’re going to see more either going to low-cost countries or reshoring to the U.S. because of the risk that a place like China poses for a supply chain,” she added.

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Congrats to Mexico.

3rd Gear: Ferrari Only Growing Slower

Ferrari, unlike fellow supercar/race car company McLaren, is doing just fine riding out the pandemic. Revenue has dropped for sure, and the company is busy sweating out how much growth it could have achieved this year without an virus and economic crisis, but it seems like things will be fine in the end, according to Yahoo Finance:

Italian sports car maker Ferrari (NYSE: RACE) on Monday reported second-quarter revenue of €571m (£514, $669m), a 42% drop compared to the same quarter of 2019, thanks to the fallout from the coronavirus pandemic.

[...]

The carmaker cut its already cut its guidance for the year ahead in May to take the pandemic into account, saying then it expected its 2020 earnings before interest, tax, depreciation and amortisation to be lower that 2019, between €1.05bn and €1.2bn.

However, Ferrari also noted in May that demand was relatively strong despite the crisis, and deliveries in the first quarter of 2020 had risen by around 5%, to 2,728 vehicles in the quarter. The iconic sports-car brand launched five new models last year, and reported sales of 10,000 units.

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Meanwhile, Yahoo Finance reports Aston Martin posted a first-half operating loss of £159.3 million, or $206 million, which is four times as much as it was losing this time last year. Bad trend for the new AMG boss to reverse.

4th Gear: AV Legislature Will Have To Circle The Block

You would hope your U.S. congress would be hard at work fighting to secure you some sort of stimulus, as expanded epidemic unemployment benefits expired at the start of the month. Instead, they all went home to their mansions.

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You will, then, not likely be surprised that these people aren’t actively thinking about the conceptual introduction of autonomous vehicles and their impact on society. Auto News reports that, rather obviously, any AV legislature isn’t likely to happen this year:

“I don’t have much money, so I won’t put my money on a bill being done this year,” said Ron Thaniel, vice president of legislative affairs at the Intelligent Transportation Society of America. “It’s a tough lift this Congress, and frankly, it’s looking more and more like the 117th Congress [which starts next year], as far as getting the bill done.”

[...]

At issue are some of the same disagreements that sunk the AV START Act in the Senate in December 2018. That bill would have affirmed the Department of Transportation’s traditional role in regulating vehicles from bumper to bumper and sought to preempt state laws governing autonomous driving operations. Since federal regulators have established only voluntary safety standards to date, that aspect of the bill concerned Peter Kurdock, general counsel at the nonprofit Advocates for Highway and Auto Safety.

“It’s unprecedented in our mind that the government is saying it’s not going to act; however, in the absence of regulation, states cannot act,” he said. “It was creating a dangerous regulatory vacuum in our mind.”

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Just keep an eye on that Tesla in your lane.

5th Gear: Only 7-Eleven Confident In Gas Station Retail Future

7-Eleven has freaked out its investors by reviving a formerly-stalled deal to buy a bunch of Marathon gas station retail stores—stores the gas company really wanted to get rid of. The deal marks both sides of the market perspective for the future of transportation retail, with everyone wondering how long gas stations have left.

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Here’s more on the deal from Bloomberg:

Seven & i Holdings Co., the world’s largest convenience store operator, is betting $21 billion on the future of quick-stop shopping in the U.S., reviving a once-abandoned deal to make sure the target didn’t fall into the hands of a competitor.

The global operator of the 7-Eleven franchise agreed to buy Marathon Petroleum Corp.’s gas-station business, adding 3,900 Speedway outlets to clinch a dominant position of almost 14,000 stores in the U.S. and Canada.

Seven & i pushed ahead despite the uncertainty of the pandemic and investor pessimism. Its shares declined 4.8% in Tokyo on Monday. Marathon rose 13% before regular U.S. trading hours.

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7-Eleven’s home market of Japanese convenience stores faces an aging population that are less inclined to pickup up snacks and refreshments, so it’s been seeking to grow in global markets like the U.S. for the last few years.

Reverse: American Roadtrip: Horror Story

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Neutral: How Much Do You Care About Moving Manufacturing Out Of China?

Would you rather the jobs go to South Korea and Mexico rather than China? Or are you curious to see how much re-shoring to the U.S. actually happens?

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DISCUSSION

It’s almost like the executives and designers at these EV startups were asleep in business school, or throughout the last two decades.

When major shifts in technology have been successfully brought to market - with the Prius in the compact-economy segment, and later with the Model S for lux sedans - they were made successful in vehicles that were built to look normal. Not oddly futuristic. Those cars fail.

If you’re going to bring an electric pickup truck to market, and you want to succeed, it’s extremely clear that it should look as much like a standard truck that is on the market already as possible.