While things have been going downhill recently for Lordstown Motors, it seems the process has only accelerated. A document from the U.S. Securities and Exchange Commission (SEC) contradicts statements given earlier this week from Lordstown’s president Rich Schmidt. So will the electric vehicle market ever get to know Lordstown’s Endurance truck?
What is happening with Lordstown Motors now?
Lordstown Motors founder and CEO Steve Burns and Chief Financial Officer Julio Rodriguez officially stepped down this Monday morning. However, according to Reuters, the company recently did an internal investigation with Hindenburg Research LLC. Hindenburg has a reputation for entering the picture when things are dire.
The investigation found that Lordstown overstated the pre-orders for the electric vehicle trucks in development. Lordstown remarked that was not the case. In addition, the investigation found that the company misled investors about future production plans.
Angela Strand was named as the newest executive chairwoman of the company. She was already the lead independent director but will take over until the company finds a more permanent CEO. In addition, Becky Roof was named as the interim finance chief.
Lordstown Motors sent the SEC a letter
According to Arstechnica, Lordstown Motors said that the company had enough binding orders to start production just yesterday. Lordstown’s president Rich Schmidt commented that there were enough firm “binding orders” to start production through May 2022. That would get the company through about 20,00 of the new Endurance electric vehicle truck.
Schmidt also claimed the company had $400 million in the bank, and there was no reason to worry. Well, that lasted all of 24 hours. A document sent to the U.S. Securities and Exchange Commission (SEC) from today says otherwise.
“To clarify recent remarks by company executives at the Automotive Press Association online media event on June 15, 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. As previously disclosed in our Form 10-K/A for the year ended December 31, 2020, filed with the Securities and Exchange Commission on June 8, 2021, to date, we have engaged in limited marketing activities and we have no binding purchase orders or commitments from customers.”Lordstown Motors Co.
In other words, these orders are not enough to propel Lordstown Motors out of the hole it has fallen into. The media previously speculated that some of these orders were orders for influencers or those who might not actually be committed to paying. That isn’t to say that no one is willing to pay for the truck, but these orders do not require it.
Are these the final acts of the EV company?
The letter also discusses that Lordstown Motors has been working with a fleet management company. This company sometimes will purchase vehicles to lease to other customers, which would be a large purchase if it went through. So Lordstown is working on that business relationship as we speak. However, there are no binding orders to keep the company moving until that falls into place.
It sounds like the company is pivoting its priorities as a last-ditch effort to stay afloat. Unfortunately, the confusing nature of the statements presented publicly this week compares to these official documents is fairly alarming.