Cash Incoming: Lordstown Motors to Merge, Go Public

The question of how fledgling EV maker Lordstown Motors plans to fund production of the Endurance pickup has been answered. On Monday, the owner of GM’s former Lordstown Assembly plant announced a merger with a blank-check company, with a cash-raising NASDAQ listing as its goal.

Lordstown Motors plans to finalize the merger with DiamondPeak Holdings Corp., which is already listed on the NASDAQ, by the fourth quarter of this year — after which the combined entity will carry the symbol “RIDE.”

With the merged companies valued at $1.6 billion, Lordstown expects to gain $675 million in gross proceeds from the deal. That’s money that’ll be put to use in a hurry, readying the Endurance for production in the second half of 2021, as well as funding concurrent production of the truck’s hub motors.

Lordstown says it has 27,000 pre-orders for the truck — a figure worth about $1.4 billion when translated into actual sales.

“We are thrilled with the opportunity to build Lordstown Motors into a top-tier electric truck company that is highly differentiated from the competition,” said Lordstown Motors CEO Steve Burns in a statement. “We are uniquely positioned to be a leader in the industry, with our first vehicle, the revolutionary Lordstown Endurance. Our all-electric full-size pickup truck delivers the equivalent of 75 miles per gallon and has been systematically engineered and competitively priced specifically for the large commercial fleet market, which includes companies in manufacturing, contracting, utilities, transportation and delivery, and agriculture, among others.”

The company’s aim, as Burns suggests, is to leave the high-zoot retail EV pickup game to the big players, focusing instead on an affordable alternative for fleet buyers. Simplicity will be key to keeping the vehicle’s price low and buyers interested. Burns said the model’s “streamlined and simplified design positions the Endurance to be one of the simplest and most cost effective vehicles on U.S. roads.”

We got our first glimpse of the Endurance in late June; since then, it seems the model’s ambitious production timeline has caught up to the company’s financial situation.

Mergers with special purpose acquisition companies are all the rage these days among wannabe EV makers, and with good reason. Lofty electric promises seem to send Wall Street into a explosion of euphoria that defies all logic. Look at the sky-high valuations of Tesla and would-be rival Nikola for proof. Noticing this, Fisker hopped on the SPAC bandwagon early last month to fund the production of its own electric crossover.

Now it’s Lordstown’s turn.

[Images: Lordstown Motors]