Lordstown Motors Corp.’s Endurance electric pickup truck. sits on stage during an unveiling ceremony in Lordstown, Ohio, the United States, on Thursday, June 25, 2020.
Matthew Hatcher | Bloomberg | Getty Images
Competitive electric truck company Lordstown Motors has enough funds to operate through May 2022 and remains on track with the limited in late September following a board reorganization that ousted the start-up’s CEO and chairman To begin production of its endurance pickup, executives said Tuesday.
The company’s new chairwoman Angela Strand called it a “new day” for the aspiring automaker, which raised bankruptcy concerns after warning investors last week that it had “significant doubts” about its ability to continue the next year.
Lordstown Motors shares rose as much as 15% on Tuesday afternoon before hovering around $ 10 per share, up 8%. The company’s share price has been roughly halved this year, including an 18.8% drop on Monday.
“It’s a new day in Lordstown and there are no disruptions and there will be no disruption to our daily operations,” Strand said during a webcast for the Automotive Press Association. “We continue to strive to inspire, build and maintain trust and transparency in our relationships with one another at Lordstown and most importantly with our customers, partners, suppliers and shareholders.”
The comments come a day after Lordstown’s Chairman and CEO, Steve Burns and CFO Julio Rodriguez stepped down after the board released a summary of an internal investigation into allegations by short seller Hindenburg Research that Lordstown misled investors.
The company said the internal investigation found that Hindenburg’s report was “fundamentally incorrect and misleading.” However, the investigation identified “issues related to the accuracy of certain statements about” Lordstown’s pre-orders, specifically the seriousness of the orders and who was making them.
President Rich Schmidt said the company needs more experienced leaders. And while Lordstown didn’t say the investigation resulted in Burns and Rodriguez’s resignation, he implied that the results contributed at least in part to their abrupt exit. “It was a bit of both,” he said.
Hindenburg accused Lordstown in March of using “fake” orders to raise funds for its Endurance electric pickup truck. The short seller said the pickup was years away from production, but Lordstown kept it to start manufacturing the vehicle in September. The company announced on Monday that deliveries to customers should begin in the first quarter of 2022.
Steve Burns, Chief Executive of Lordstown Motors Corp, poses with a prototype of the electric vehicle startup’s endurance pickup truck, which will begin construction in the second half of 2021, at the company’s facility in Lordstown, Ohio, USA, June 25, 2020.
Lordstown Motors | Reuters
The Securities and Exchange Commission has opened an investigation into Hindenburg’s claims and the company’s merger with SPAC DiamondPeak Holdings. Schmidt did not want to comment on request.
Strand, who was Lordstown’s senior independent director, is overseeing the transition pending a permanent CEO, the company said.
Schmidt re-confirmed that Lordstown is actively raising additional capital, which the company announced in May. He also said that Lordstown is no longer working with Camping World on EV products and solutions for the RV market, citing the need to focus on endurance.
“We are currently only focusing on the endurance truck,” he said. “This is our next goal for the next three months to ensure that we meet our production targets, meet our budgets and get the vehicles ready for the market.”