By on March 1, 2022

Lordstown Motors has gone from the savior of Ohio to just another blowhard electric vehicle startup. Last year, it became the focus of investment research firm Hindenburg Research and an incredibly damning report that accused the company of fraudulent behavior. The paper cited thousands of non-binding, no-deposit orders and was proven right a few months later when the startup announced it didn’t actually have enough money to commence commercial production. By June, Lordstown was under investigation and losing top-ranking executive with nothing to show for itself other than a factory it purchased from General Motors at a discount where it installed a pointless solar panel array. The company said it would be selling the plant to Foxconn Technology Group (Hon Hai Technology Group) in October, along with $50 million in stock, with the plan being to make the Taiwanese firm a contract assembler for the Lordstown Endurance pickup.

It’s going to need that money too because GM is severing ties with the startup and has confirmed it offloaded its remaining stock over the holidays. While the Detroit-based automaker only held about $7.5 million worth of shares, it still represented about 5 percent of Lordstown and continued support of a business that looked to be foundering. 

GM spokesperson Jim Cain told the Detroit Free Press that the shares were dumped on the open market at the end of 2021. “We were a small investor in the company, the goal was to help facilitate the sale of the plant and the restart of production,” he said.

From the Detroit Free Press:

On Monday, Lordstown Motors reported its fourth-quarter net loss widened to $81.2 million compared with a loss of $38 million in the year-ago period, as it was hit with $115 million in expenses. For the full year, the startup reported a $410 million loss compared with 2020’s year-end loss of $102 million, though leaders promised it would start limited production of its Endurance electric pickup later this year.

Last fall, Lordstown Motors entered talks to sell the former GM facility to iPhone maker Foxconn for $230 million. The deal is not done, but it will help Lordstown Motors raise the money to launch and grow Endurance sales, said Lordstown CEO Dan Ninivaggi. Lordstown would lease space.

“This is one of the most challenging situations I’ve seen, but I knew it when I was coming in,” Ninivaggi told Wall Street analysts Monday. “I’m maniacal, maniacal about getting this done. It’s going to be about talent and our ability to execute. Scale matters a lot in this industry. You’re going up against big players. So we’re trying to be smart about that. I’ve said early on, ‘We’re all in on Foxconn,’ but we need to prove out the benefits of that relationship and it’s got to be a win-win.”

Lordstown is said to have enough money to operate through 2022. But CFO Adam Kroll believes it needs to finalize its deal with Foxconn and drum up another $250 million if it expects to achieve any “long-term viability.”

The company has endured numerous setbacks and continued suggesting it needs more cash to reach a point where it can deliver all-electric products with any regularity. Originally, the plan was to assemble 2,000 pickups over the launch period and average 32,000 units through its first full year of production — with the Endurance starting at $52,500.

Lordstown now believes it can field 500 Endurance pickups by the end of 2022 and build “up to” 2,500 trucks next year — they’ll be starting at $63,500.

“We feel that our value proposition for the Endurance, plus the economics and availability of battery-electric, full-size pickups in the market right now really justifies our price point,” President Edward Hightower explained to analysts. “We’re launching the vehicle with a significant amount of standard options.”

Perhaps. But the company is losing ground to established manufacturers that are all on the cusp of delivering all-electric trucks of their own. Had the Endurance commenced production in 2020 as originally planned, Lordstown could have dunked on everybody. Now, limited quantities will be forced to compete with the Rivian R1T, GMC Hummer EV, and Ford F-150 Lightning the second they leave the factory… if they leave the factory. And more competition is coming, often with greater towing capabilities and better range than Lordstown is offering.

It’s no secret that starting a car company is a grueling, borderline impossible proposition. The industry typically rejects newcomers and legacy manufacturers are often aided (unwittingly or not) by regulatory laws that are extremely difficult/expensive for smaller entities to comply with. But these EV startups often seem to be financial black holes by design, exclusively benefiting those who got in early and bailed before the brand image becomes forever tainted. It’s hard to say if Lordstown is one of those with any real certainty. But the business certainly seems to have grossly oversold its own production capabilities and is now suffering as a result.

The company still needs to decide upon a joint-vehicle development platform with Foxconn before their deal is finalized. Lordstown wants something for North America and Foxconn is seeking an overarching EV platform it can sell globally. Without it, there is no factory sale or backward leasing arrangement to ensure the Endurance gets manufactured.

“It’s certainly possible that we don’t conclude an agreement, but it’s highly unlikely,” Ninivaggi said. “Conversations have been ongoing. If we get to a point where we can’t get a joint development agreement … we’ll have to consider other alternatives but we’re not at that point yet.”

[Image: Lordstown Motors]

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36 Comments on “GM Dumps Lordstown Motors...”


  • avatar
    Margarets Dad

    Why would anyone invest five cents in this company at this point? What are they offering that Rivian and Ford are not? They brag about making 2,500 electric trucks next year; Ford will make 100 times that. And has a dealer network. And a decades-long track record of, you know, building trucks.

    • 0 avatar
      Vulpine

      Somehow I doubt Ford will make 250,000 electric trucks next year. I wouldn’t even bet on 25,000 electric trucks, but at least that is more feasible.

    • 0 avatar
      EBFlex

      “Ford will make 100 times that”

      Ford won’t crack 250K total EVs let alone 250K non-lightnings.

      Where do you people come up with this nonsense?

      • 0 avatar
        NECarGuy

        Wouldn’t a “non-lightening” be an F-150? I’m fairly confident Ford will sell way more than 250k of those next year. To quote you, “where do people come up with this nonsense? :-)

        I don’t understand your disdain for Ford and why you have to be so negative. It’s even more odd since your name is EBFlex (EcoBoost Flex)?

  • avatar
    swester

    Enough apologizing and making excuses for this thinly veiled scam that solely existed for its former CEO to exit unscathed from his previously failed venture, Workhorse.

    Everything about this company has been toxic – the backhanded deal with the Trump administration, the sketchy SPAC, the deals that don’t exist, etc. Now GM is waking up to reality here. It should be tossed into the EV fraud dustbin along with Nikola.

    It’s a shame about the false marketing promises of restoring jobs at the old GM plant, but anyone with half a brain could tell that was never going to happen.

  • avatar

    fire Mary.

  • avatar
    Cicero

    So when you choose Lordstown over Ford or GM or even Rivian you get access to obscure East European “in the hub” motor technology that adds lots of unspring weight and whose track record includes at least one test vehicle fire.

    What exactly is the selling point supposed to be here? If someone is just dying to own a truck EV, why wouldn’t they just buy a Ford Lightning?

    • 0 avatar
      Vulpine

      “why wouldn’t they just buy a Ford Lightning?”

      — Because it’s a Ford? You know, F. O. R. D.

    • 0 avatar
      EBFlex

      ” If someone is just dying to own a truck EV, why wouldn’t they just buy a Ford Lightning?”

      They want something that works? They don’t want a half-baked, cobbled together, overpriced excuse for a truck?

      I mean it’s pretty obvious

      • 0 avatar
        swester

        I’m confused which ‘half-baked, cobbled-together, overpriced excuse’ you are referring to – surely Lordstown’s, since that meets all of those criteria plus the added bonus of not really existing.

      • 0 avatar
        285exp

        At this point, only the Ford EV truck seems to be a serious mainstream truck, and even it’s just an Urban Cowboy truck, just like the others. I just watched a YouTube test of a Rivian vs a Tundra towing a laughably small 2000 lb low profile trailer, and the Rivian made it a whopping 153 miles with 9% charge remaining at an average speed of less than 60 mph. The Tundra pulled the same trailer over the same course at nearly the exact same speed and used a little over a quarter of a tank. EV trucks will be great for picking up some mulch from Lowes or hauling your golf clubs to the country club, but they are jokes for people who really need a truck.

  • avatar
    FreedMike

    It’s a shame – this is a city that could have definitely used the jobs.

    By the way, saw my first Rivian pickup this past weekend in L.A. – not too shabby at all. I like that it’s not cartoonishly oversized, ala F150.

    • 0 avatar
      here4aSammich

      To be honest, I think the valley has a better chance of getting jobs from Foxconn. Hopefully they don’t walk away from the deal to buy the plant.

    • 0 avatar
      sckid213

      I saw a Rivian last night on the 405 Freeway in Irvine heading north. Maybe same one? Very distinct rear light signature with that long LED bar. Think it was white but it was dark and it was quite a ways ahead of me.

      • 0 avatar
        FreedMike

        @sckid:

        The one I saw was metallic green, and it was on display at a festival in San Juan Capistrano. A company rep was there to “show it off” and answer questions. Apparently this is part of Rivian’s marketing approach.

  • avatar
    Vulpine

    Somehow I just KNEW something like this would happen; the company never really seemed to have anything to show for itself. Rivian at least put some effort into real design and seems to be moving forward, even if a bit slowly, and looking like a true startup operation, albeit with some help from Ford, IIRC. This? I think GM screwed itself with another, rather obvious, mistake which could hurt its own future prospects.

  • avatar
    Imagefont

    Don’t you buy no ugly truck!

  • avatar
    SCE to AUX

    Everybody thought Elon Musk was the maniac. But Lordstown CEO Dan Ninivaggi has declared *himself* to be the maniac.

    Actually, Lordstown might reach production before the Cybertruck.

  • avatar
    ToolGuy

    “It’s not me, it’s you.”

  • avatar
    Jeff S

    The Chinese are the ones to watch when it comes to EVs https://cleantechnica.com/2021/12/27/is-2022-the-year-chinese-cars-cohttps://carbuzz.com/news/chinese-carmakers-are-coming-after-tesla-in-americame-to-america/ https://www.youtube.com/watch?v=q5GGCVIEYts&ab_channel=CNBC https://www.nytimes.com/2021/10/31/business/electric-cars-china-europe.html https://www.youtube.com/watch?v=q0rzFJ1iXjE&ab_channel=TopTrendingCars

    • 0 avatar
      SCE to AUX

      Entering the US market would be extremely difficult for a Chinese auto mfr; it’s been hard even for domestic ones like Tesla, Rivian, and Lucid.

      Think of what Peugeot would have to do to re-enter the US market, for instance.

  • avatar
    wolfwagen

    Why isn’t this story under Lordstown Death Watch?

    Honesty, its time for these guys to give up. An Ugly vehicle, unproven technology (out of eastern Europe no less) and bad management/leadership is bad enough for a legacy automaker but its the kiss of death for a start up.

    Rivian will have a hard enough time trying to sell their pick up, but they will probably hold their own and cater to the wealthy & uber wealthy while GM & Ford (you know the two companies that together have over 200 years of truck manufacturing and R&D experience) will cater to the rest.

    Tesla will get their fan boys and those who like the futuristic design provided 1.They can actually build the damm thing and 2. Get it right when it is released.

    Personally, I would rather see Alpha and Canoo succeed before Lordstown and their stuff is pretty much vaporware.

  • avatar

    I think Lucid will be next on the hit list. Lucid is having problems just producing a couple of hundred vehicles. This illustrates just what a miracle Tesla is. it has mastered design and engineering along with manufacturing. Like many companies during the Dotcom boom of the late 90s, many EVs companies will not survive. In five years, maybe the next fad will be Hydrogen Power. In this shareholder climate, everybody is looking for the next trend.

    • 0 avatar
      FreedMike

      I’d quibble somewhat with the argument that Tesla has “mastered” manufacturing, but you’re right – what they’ve achieved is pretty amazing.

      • 0 avatar
        mcs

        @FreedMike: I think they might have actually mastered manufacturing, but it won’t really bear fruit until the new plants and redesigned cars are fully ramped up. The redesigned Y and Austin are the ones to watch. We’ll see if they’ve learned from their previous mistakes there.

      • 0 avatar

        Tesla has not quite mastered the finer points of manufacturing, but they are improving every year. In contrast Lucid can barely produce a hundred vehicles without having production stopped to correct assembly and quality issues. I would say they will be lucky to produce 5,000 vehicles this year. The ironic thing is Lucid Air maybe superior to anything Tesla is producing.

  • avatar
    Vanillasludge

    As a resident of Wisconsin I can assure you that Fox-con will not be the savior of anything.

  • avatar
    dukeisduke

    It’s ironic that a company named “Hindenburg” helped sink Lordstown. Shouldn’t Hindenburg be advising on hydrogen fuel-cell startups?

    Poor Lordstown can’t catch a break. I owned two different Vegas years ago, and I never saw any issues with the cars that I could pin on the plant and its workers. They were forced by GM (not even really Chevrolet) to build vehicles at breakneck speed, which was big contributor to their quality issues, certainly in the early years of the run.

  • avatar
    SoCalMikester

    electric business vehicles WILL catch on, if its really cheaper.

  • avatar
    NECarGuy

    Wouldn’t a “non-lightening” be an F-150? I’m fairly confident Ford will sell way more than 250k of those next year. To quote you, “where do people come up with this nonsense? :-)

    I don’t understand your disdain for Ford and why you have to be so negative. It’s even more odd since your name is EBFlex (EcoBoost Flex)?

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