Lordstown Motors was one of several EV startups to go public via special purpose acquisition company, along with Nikola and Fisker, all of them dubious in one way or another. It now seems like Lordstown Motors will be the first to break, as we wrote Tuesday, though probably not the last.
This has all been very predictable, almost inevitable, even, after Hindenburg, a short-selling firm, released a detailed report in March describing how the company was not what it purported to be. That report sent Lordstown Motors’ stock down, but in reality it was already going down, likely in part because one of Lordstown’s biggest cheerleaders is no longer president.
On Wednesday, stock in Lordstown was down about 12 percent, which actually isn’t that bad considering that just yesterday it said that it, “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...” Lordstown, in other words, has no product and is quickly running out of cash.
It was less than three weeks ago that Steve Burns, Lordstown’s CEO, insisted that the company was still on track for September production of the Endurance. Burns also said, referring to Ford and the F-150 Lightning, “We are on par with somebody like that at this point, and we’re getting to market faster. We want as many people buying our vehicle while we’re the only game in town. We want to be on version 2.0 when somebody comes out with version 1.0.”
Ending in humiliation — and to be clear, we’re not at the end just yet — would not make Lordstown Motors exceptional in the history of automaking, as going out of business is actually more the rule for new automakers. Which means that if Nikola or Fisker or any of the other car startups make it that will be a bigger surprise than if they don’t.
Over three years ago, I did a guide to the car startups that matter and tried to assess the chances of Tesla, Faraday Future, Lucid, Karma Automotive, Elio Motors, Nio, Zoox, Nuro.ai, Byton, and Lynk & Co. About half of those now don’t exist, or barely exist, while the rest — outside of Tesla and maybe Nio — are still trying to find a foothold. Making cars is hard.