Lordstown Motors Cuts Production Estimates By More Than Half

Matt Posky
by Matt Posky
lordstown motors cuts production estimates by more than half

One of the biggest contributors to EV skepticism are the companies associated with furnishing the technology. While brands like Tesla have unquestionably proven that there’s a market for electric cars, there’s a cadre of startups that seem built on a foundation of falsehoods and do nothing other than vacuum money to feed hypothetical products that never seem to manifest in the physical realm. But the problem is that it’s incredibly difficult to distinguish between them when even Tesla participates in making wild promises it clearly has no intention of keeping and is heavily dependent on regulatory issues favoring EVs — specifically via the sale of carbon credits.

Lordstown Motors has occupied a gray area between the extremes. However, it recently cut this year’s production targets by more than half, warranting some legitimate concern.

Founded in 2018 by former Workhorse CEO Steve Burns, the startup has plenty going for it. Your author has seen the factory with his own eyes, placing it ahead of many other EV startups, and has access to intellectual property we know has resulted in the construction of at least one functional electric pickup.

But it also engaged in a reverse merger with special-purpose acquisition company (SPAC) DiamondPeak Holdings last year. This resulted in a sizable estimated equity value of $1.6 billion, though the practice of backward SPAC mergers has become associated with technology entities that never end up building anything. Hindenburg Research — the infamous firm that specializes in shorting companies it doesn’t think have much to offer — claimed the company demonstrated a history of fraud in regard to demand for its products and its own ability to manufacturer trucks at a meaningful pace.

The latter claim has turned out to be undeniably true. The New York Times is reporting that Lordstown Motors has confirmed that it will make just 50 percent (or less) of the vehicles it had previously hoped to manufacture this year. Unless it can get more money, that is.

From NYT:

“What we are saying is that if we don’t get any funding, we might only make half of what we thought,” Lordstown’s chief executive, Steve Burns, said Monday during a conference call.

Mr. Burns said the company was still on track to begin making trucks by September.

Lordstown has had discussions with some strategic investors who could pump money into the company, he said, and it has looked into borrowing money by using its plant or other assets as collateral.

He also said the company was looking into borrowing from a federal government program meant to support the development of electric vehicles, but it was unclear if it had any funds left.

This means Lordstown would be able to produce as many as 2,200 trucks by the start of 2022 if it gets the money. If not, Burns said it probably wouldn’t even manage to build 1,000 units.

Before I go off on how EV startups frequently seem to be a clever way of lining the pockets of upper management and investment firms that help get them onto the stock market, it should be said that the entire automotive industry is tamping down production expectations this year. Lordstown is also maintaining its commitment to actually start manufacturing cars this fall, which is somewhat encouraging.

But it wasn’t sufficient in keeping everybody invested. Shares dropped 15 percent at the start of trading on Tuesday, rebounding slightly in the afternoon.

[Image: Lordstown Motors]

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2 of 16 comments
  • Renewingmind Renewingmind on May 26, 2021

    I’ve been operating with the assumption that Lordstown Motors was nothing more than a scam, yet have to admit that I was surprised to drive by the factory and see 100+ cars in the parking lot. SOMEBODY is in there on a weekday. I can’t imagine they are just playing laser tag. But I agree, if the F-150 lightning ships the startups are doomed. Pretty confident that Ford will be around to handle warranty claims. Lordstown? Not so much.

  • Akear Akear on May 26, 2021

    Let's be brutally honest, Lordstown motors will eventually go out of business like most electric car makers that are not Tesla. Maybe they can build a few thousand vehicles a year before they go under. How is Nikola doing? Has their crook CEO left the country yet?

  • Tassos Before you rush to buy this heap of rusty metal, maybe you should wait a day or two.I hear Tim will have an Model T next time.
  • Redapple2 I d just buy one already sorted. Too many high level skills (wiring, paint, body panel fitment et. al.) that i dont have. And I dont fancy working 100 s of hours for $3 /hour.
  • 28-Cars-Later I'm actually surprised at this and not sure what to make of it. In recent memory Senator Biden has completely ignored an ecological disaster in Ohio, and then ignored a tragic fire in Hawaii until his handlers were goaded in sending him and his visit turned into it's own disaster, but we skipped nap time for this sh!t show? Seriously? We really are through the looking glass now, "votes" no longer matter (Hillary almost won being the worst presidential candidate since 1984 before he claimed the crown) and outside of Corvette nostalgia Joe doesn't care let alone know what day it happens to be. Could they really be afraid of Trump, who AFAIK has planned no appearance or run his mouth on this issue? Just doesn't make sense, granted this is Clown World so maybe its my fault for trying to find sense in a senseless act.
  • Tassos If you only changed your series to the CORRECT "Possibly Collectible, NOT Daily Driver, NOT Used car of the day", it would sound much more accurate AND TRUTHFUL.Now who would collect THIS heap of trash for whatever misguided reason, nostalgia for a much worse automotive era or whatever, is another question.
  • ToolGuy Price dropped $500 overnight. (Wait 10 more days and you might get it for free?)