Update, June 14, 2021
The electric vehicle start-up, Lordstown Motors, announced Monday that its chief executive, Steve Burns, and chief financial officer, Julio Rodroguez, have both resigned. This comes following the release last week of the company’s filing to the Securities and Exchange Commission that cast “substantial doubt” on its ability to move forward without additional funding.
An investor’s report earlier this year questioned the viability of Lordstown Motors, and its statements about customer interest in its electric trucks.
According to the New York Times, an internal board has investigated those claims. The company has hired an executive search firm to find replacements for the CEO and CFO.
June 9, 2021
The future of Lordstown Motors, an independent electric truck manufacturer considered an anchor of “Voltage Valley” in eastern Ohio, came into question Tuesday when the company’s delayed quarterly and annual filings with the Security and Exchange Commission were made public.
In it, the company states, “Our ability to continue…requires us to manage costs and obtain additional funding to ramp up the production phase of our operations.”
The company is seeking additional funding, including a federal loan. “We require additional capital to implement our business plan, and it may not be available on acceptable terms, if at all, creating substantial doubt.” Lordstown Motors said in the SEC filing.
Lordstown Motors shares dropped more than 16 percent late Tuesday after the financial warning. By early Wednesday, it was down 20 percent. But by Wednesday afternoon, Reuters reported that prices were rallying, up 2 percent, as the company said it was in talks with multiple parties to raise funds.
The region, including Lordstown, Youngstown and Warren, hangs in the balance. The company projected hiring 1,500 people for its Trumbull County plant and has been an anchor of the region rebranding itself from a former steel valley to Voltage Valley. The region has been looking to the company to help drive its future in electric vehicles.
“This doesn’t change Voltage Valley,” said Youngstown-Warren Regional Chamber of Commerce President Guy Coviello. “Every time there is new technology, there will be multiple fits and starts. In addition, this is a very competitive industry. We certainly hope Lordstown Motors generates the capital it needs to produce vehicles long term.”
Coviello points to other projects that are part of the energy development in the region. “Ultium Cells, BRITE Energy Innovators and a whole lot of other investment keeps the momentum strong,” he said.
Democratic Congressman Tim Ryan, who represents the area, and is running for U.S. Senate, echoed those sentiments. “Undoubtedly, the news coming out of Lordstown Motors is concerning, and while I will continue to use my position to assist them wherever possible, it is important to remember that they are one piece of a larger movement transforming our region into what has been coined as Voltage Valley…our community is still leading the jobs of the future,” Ryan said.
This isn’t the first hint at trouble for Lordstown Motors. Earlier this year, short seller Hindenburg Research published a report on the electric truck maker, accusing it of misleading investors and being a “mirage.” Hindenburg is a financial research firm that has taken down another electric vehicle maker.
The company is also facing 5 class action lawsuits, claiming it misled investors about pre-orders the company claimed to have secured for its electric Endurance pickup truck.
The Allegheny Front is scheduled to tour the Lordstown Motors plant on June 21.