Lordstown Motors Announces New Vehicle for 2022 Amid SEC Inquiry
LORDSTOWN, Ohio – Lordstown Motors Corp. announced Wednesday that it should begin production of an all-electric van sometime in the second half of 2022, amid the revelation that the U.S. Securities and Exchange Commission has initiated an inquiry into the company.
“We’ve begun work on our second vehicle: a van,” Lordstown Motors founder and CEO Steve Burns told analysts during a conference call discussing the company’s first earnings report. “We are evaluating investments in new technologies for our future growth opportunities.”
Lordstown Motors – an EV startup that operates out of General Motors’ former Lordstown complex – is in the process of producing beta vehicles for its Endurance pickup truck, a vehicle that Burns said is the first all-electric full-size pickup in the world.
That model is expected to roll off the assembly line in late September, he said.
Burns announced at the outset of the call that the U.S. Securities and Exchange Commission has requested information from the company. This comes in the wake of a scathing report released last week by short seller Hindenburg Research that alleged Lordstown Motors has misled investors related to its production targets and preorders of the Endurance.
The Hindenburg Research report described Lordstown Motors’ preorders for the Endurance as “fictitious,” and that the company hasn’t been forthcoming about production challenges.
“We are aware of the short-seller’s report,” Burns told analysts. “We’ve also received a request for information from the SEC and we are cooperating with that inquiry. In addition, the board of directors has formed a special committee to review these matters.”
Burns declined to comment further on the Hindenburg report until the committee completes its review.
Instead, Burns used the conference call to update investors on the company’s progress in delivering the Endurance pickup and the development of future products.
“Our next vehicle will be an all-electric, four-wheel drive, high-top van,” Burns announced. The new van would have a range of about 250 miles, and be built from Lordstown Motors’ skateboard chassis.
The first use case for the van would be used as a recreational vehicle and be sold through Lordstown Motors’ partnership with Camping World. “We feel that there will be many commercial use cases for an electric van of this size and capability.”
Burns said the company has accelerated work on the van and plans to unveil a demonstration vehicle early this summer. Production is expected to begin during the second half of 2022, he said.
“Our strategy involves a multi-faceted approach,” he said, referencing the partnership with Camping World to provide service and parts support for the Endurance through its national network.
He also said Lordstown Motors would also be building out its service centers, first in California and then the Midwest. “We recently obtained our first dealer’s license to sell direct in California,” he said. “We also believe California will be aggressive in adopting electric work trucks,” helping to boost the company’s order book into 2022.
At present, the plans are to sell the Endurance as a fleet vehicle, but Burns acknowledged the company is evaluating selling the pickup in the consumer market. “It’s a little too early to talk about that right now.”
He emphasized that early demand for the Endurance is strong, and truck companies often negotiate with third-parties to broker large fleet sales – which the Hindenburg Research report criticized.
“We’re prepared to get all the way to the Promised Land with the demand we have,” Burns said.
Lordstown Motors President Rich Schmidt told analysts the company is within two weeks of producing the first beta vehicles of the Endurance at the plant. The plant expects to produce 57 betas that will be used for safety validation purposes such as crash tests, he said.
“We want to produce the first, five-star rated fully sized electric truck,” Schmidt said, “and believe ours will be the safest truck on the road.”
Plant retooling is on track, Schmidt said, crediting General Motors for providing critical parts to Lordstown Motors and selling the GM Lordstown complex to the startup.
Battery and hub motor lines are also now being installed in the plant, he added.
Given demand for the Endurance, the company expects additional capital and operating expenditures to build new tooling that would accommodate production of 60,000 vehicles, Schmidt said. The additional capital would also be used to step up production of the second vehicle.
The van, he said, would begin production during the second half of 2022, using designs from the Endurance platform.
Burns also announced that Lordstown Motors has entered the due diligence phase for the federal government’s Advanced Technology Vehicle Manufacturing loan, which Lordstown Motors hopes to complete in the second quarter. If successful, Lordstown Motors would then enter negotiations for a term loan.
The loan could provide as much as $200 million to help the company, if needed, Burns said.
In its first earnings report since going public last fall, Lordstown Motors reported a full-year net loss of $100.55 million and $630 million in cash on hand.
For the fourth quarter, the operating cost loss was $38.55 million against $316,000 in total income. The majority of income – $239,000 – was from interest. The net loss per share was 23 cents.
For 2021, there is an expected capital expenditure between $250 million and $275 million to increase plant capacity, accelerate development of the van and build additional tools to “insource componentry to create a five-star crash-rated vehicle.”
Operating expenses are projected to be $40 million and $45 million in selling and administrative costs and between $180 million and $190 million in research and development costs. The expected year-end liquidity is at least $200 million in cash and cash equivalent, not including the ATVM loan.
March 16, 2021: Lordstown Motors CEO Assures Public the Endurance Will ‘RIDE’ in September
March 14, 2021: Who Is Short Seller that Slammed Lordstown Motors?
March 12, 2021: Shares of Lordstown Motors Plunge on Short Seller Report
March 12, 2021: Source Cited in Hindenburg Research Report Refutes Its Claims
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