Lordstown has been having a terrible year, and that’s putting it lightly. The initial presentation of the e-truck led to a booming market valuation through a SPAC (Special-Purpose Acquisition Company) merger, and an impressive capital rise. Pre-orders were pouring in and so were investments. Lordstown told investors big and small that they were, together, part of a history-making moment: the first market delivery of a commercial electric pickup truck. Forget about the Tesla Cybertruck or the more recently announced Ford F-150 Lightning: here was a startup making it happen.
The first signs of trouble became apparent with the publication of a report from short-seller Hindenburg Research, leveraging serious allegations against Lordstown and now-ex CEO Steve Burns. They included, among others, claims that the firm orders for Endurance were both artificially boosted and non-binding (so, amounting to nothing); the claim that the in-wheel motor technology was far from developed enough to be included in a production vehicle; the claim that Endurance was actually years from production phase, even though the timeline included deliveries in September 2021; and an alleged history of lying and overstating of facts from Burns, the mastermind behind Lordstown.
The U.S. Securities and Exchange Commission (SEC) launched an investigation into the merger and the claims of fraud. As of the moment of press, its findings are yet to be made public, but that hasn’t kept the cracks in the once-lovely Lordstown facade from showing. They’re getting bigger, too, to the point where the promising Endurance e-truck is now a removed dream.
Reuters obtained a new regulatory filing with SEC, in which Lordstown admits that the $5 billion of future revenue claimed in legally-binding pre-orders is, more or less, a guesstimate. Put it differently, the same pre-orders that Hindenburg Research claimed were not binding and that Lordstown has been saying are firm all along, are – surprise, surprise! – not binding.
“Although these vehicle purchase agreements provide us with a significant indicator of demand for the Endurance, these agreements do not represent binding purchase orders or other firm purchase commitments,” the filing reads. Translation: they’re not orders per se but a tool to gauge potential interest in the truck. This wouldn’t be as bad as it looks if, just 48 hours later, new President Rich Schmidt hadn’t assured investors that Lordstown had “enough orders for production for ‘21 and ‘22” and that the orders were “firm.”
This comes hot on the heels of Lordstown admitting to investors it’s stuck in financial hell, where it can’t fulfill promised production unless it secures more funds. At best, the company is looking at a halved production of the Endurance; at worst, it’s looking at massive delays or even complete dissolution. It doesn’t help either that one official statement contradicts the previous one, or that several lies have already gone on the record (like this one, about the “firm” orders, which Lordstown has been saying since March, only to do a complete 180 on it after the SEC filing). Burns’ recent ousting as CEO and, before that, his statements that Endurance was comparable to the Ford F-50 Lightning but better, and his promises that the Endurance would be the first commercial electric truck to market, only add to the weight that’s bearing down on this formerly-promising EV.
At this point, Lordstown actually delivering Endurance in three months’ time is looking like a pipe dream. Whether it’s because of ill-will or deliberate deceit on part of Burns & Co., or this is yet another case of underestimating the production process, no one knows. But maybe time will tell.
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