We’ve never had much faith in Lordstown Motors going the distance and now there’s even less reason to hope after the company filed a 10-Q form Tuesday. It admitted “The Company believes that its current level of cash and cash equivalents are not sufficient to fund commercial scale production and the launch of sale of such vehicles.”
It was just last week that Lordstown saying it still had an EV truck in this fight, albeit maybe at half-capacity for the first year. From the New York Times:
“What we are saying is that if we don’t get any funding, we might only make half of what we thought,” Lordstown’s chief executive, Steve Burns, said Monday during a conference call.
Mr. Burns said the company was still on track to begin making trucks by September.
Lordstown has had discussions with some strategic investors who could pump money into the company, he said, and it has looked into borrowing money by using its plant or other assets as collateral.
He also said the company was looking into borrowing from a federal government program meant to support the development of electric vehicles, but it was unclear if it had any funds left.
Lordstown would be able to make as many as 2,200 trucks by the end of the year if it gets funding, Mr. Burns said. Without additional capital, it would probably make fewer than 1,000.
Now not only does Lordstown doubt it can begin building any of the Endurance pickup truck in September like it previously planned, it may not be able to survive as a company at all, citing in its filing “substantial doubt regarding our ability to continue as a going concern one year from the date these financial statements are issued.” The company is currently being investigated by the Securities and Exchange Commission for misleading investors. From the filing:
The Company had cash and cash equivalents of approximately $587.0 million and an accumulated deficit of $259.7 million at March 31, 2021 and a net loss of $125.2 million for the quarter ended March 31, 2021. Since inception, the Company has been developing its flagship vehicle, the Endurance, an electric full-size pickup truck. The Company’s ability to continue as a going concern is dependent on its ability to complete the development of its electric vehicles, obtain regulatory approval, begin commercial scale production and launch the sale of such vehicles. The Company believes that its current level of cash and cash equivalents are not sufficient to fund commercial scale production and the launch of sale of such vehicles. These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of issuance of these unaudited condensed consolidated financial statements. To alleviate these conditions, management is currently evaluating various funding alternatives and may seek to raise additional funds through the issuance of equity, mezzanine or debt securities, through arrangements with strategic partners or through obtaining credit from government or financial institutions. As we seek additional sources of financing, there can be no assurance that such financing would be available to us on favorable terms or at all. Our ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, our performance and investor sentiment with respect to us and our industry.
Problems have dogged the company that President Trump and Vice President Pence hailed as a savior of the Rust Belt. GM even gambled on backing the company (in exchange for some heavily discounted EV tax credits as it turns out) though it won’t get any discounted credits if Lordstown never makes any trucks.
Investment research firm and Lordstown short-seller Hindenburg Research has been sounding the bullshit horn on Lordstown and in particular CEO Steve Burns for quite some time now. Burns’ claim of over 100,000 trucks ordered seemed too good to be true, and in fact, they were. Burns was referring to a non-binding Letter Of Intent to purchase the trucks as “sales” but no money was changing hands and even those were filled out by sketchy half-real companies.
I don’t care if some blowhard CEO gets hurt, or GM loses out on its precious cheap tax credits so it can keep building dirty engines. I feel for the folks of Warren, Ohio, and the surrounding area who were counting on Lordstown to replace those well-paying union GM jobs that left town in 2019. They’re the ones who were pumped up with false hope by some of the most powerful people in the world, and they’re the ones who will be left holding the empty sack at the end of the day.