We warned you about this last month and now here we are. Lordstown, the Ohio EV manufacturer that has never manufactured anything, has announced if it doesn’t get to burn through some more money it won’t make the EV trucks it has never made. Or something like that. This is the end for Lordstown.
Wasn’t Lordstown supposed to be making trucks now?
Lordstown was supposed to be well on its way to making one of the first electric trucks. But timelines keep moving and setbacks remain a part of Lordstown’s MO. While September was the new starting date to begin assembly, Lordstown is now saying it has “substantial doubt” it can remain in business.
For a statement like that to be made flies in the face of good messaging. First, its stock plunged 20 percent at the halfway point today according to CNN Business. It also braces suppliers that they may never get paid. So Lordstown’s supply chain is now in protection mode.
Most suppliers will demand payment for existing components already delivered before sending out new products. Banks and investors will begin to back away from further funding, too. Lordstown’s statement creates a fulfillment of prophecy. It signals the inevitable end of the company.
Lordstown started with an ex-GM 6.2 million sq. ft. facility
The Lordstown phenomenon has been in the spotlight almost since the day GM stopped producing Saturn sedans there in 2019. The 6.2 million square foot facility stood empty for only a short time before Lordstown somehow cajoled GM into selling it to them for s pittance.
And the race then commenced creating an electric pickup truck that never seemed ready for prime time. Now we are at the point where financial bleeding can’t be stopped, and the white flag is unfurled. While broadcasting dire warnings it is still asking for help in finding additional financing. The statement that doubts its ability to stay in business makes this folly.
Rivian, Ford with its F-150 Lightning, and Tesla with its Cybertruck are all poised to begin production soon. Once those companies pull the trigger, it puts Lordstown in a precarious position. It would no longer be viewed as unique but merely an also-ran.
Things really went south after Hindenburg Research began shorting Lordstown stock
But the writing has been on the wall thanks in part to an investment company’s shorting of Lordstown. Hindenburg Research raised doubts about Lordstown’s contracts for large quantities of vehicles. Those contracts were partially fueling Lordstown’s growth. Without actually making anything.
“After months of denials, Lordstown is finally beginning to acknowledge its precarious financial state and that its earlier production projections were nowhere close to reality,” Hindenburg said in a statement yesterday. Lordstown stock values have tanked since Hindenburg’s report. Then the SEC decided to investigate Lordstown’s pre-order claims. Oh, and Lordstown’s lone test vehicle burned up in testing.
Would we be remiss to say things are snowballing right now? Saying you have doubts about your chances of staying in business much longer pretty much means you’re unable to stay in business. The sooner it folds the sooner its 600 employees can move on to hopefully rebound stronger from the whole bad Lordstown mess.