Embattled tech startup Lordstown Motors have admitted they do not have any firm orders for their debut truck days after claiming otherwise.
The electric truck firm, based in Warren, Ohio, made the admission shortly after its president claimed there were enough orders for its Endurance truck to see the firm through 2022.
At a meeting of the Automotive Press Association of Detroit, Lordstown President Rich Schmidt claimed that the company was on track to begin production in September.
He announced that the startup had enough binding orders to continue production at its plant in Lordstown, Ohio through May 2022.
But on Thursday, the company admitted that the statements Schmidt made about the orders were inaccurate saying: ‘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.’
The price for shares of the company have been cut in half this year and slid at the opening bell Thursday before slightly recovering.
Lordstown Motors stock opened at $10.06 per share and gradually recovered peaking at $11.07 until it hit a low at $10.03 at 12:20 pm EST. Share prices had closed at $10.78 the previous day.
That is almost a third of the all-time high of $29.01 recorded in September 2020, with Lordstown shares trading for a respectable $26.91 as recently as February.
Lordstown Motors changed course on Thursday when they admitted that they do not have any reliable firm orders for their electric trucks days after the company’s president said otherwise
Earlier this week Lordstown President Rich Schmidt claimed that the company had enough preorders of their Endurance electric pickup truck to begin production in September and last through May 2022
Share prices for Lordstown Motors stock is currently far off from its all-time high of $29.01 in September 2020 as they opened on Thursday at $10.06
Lordstown Motors has continued to struggle this year with potential class-action lawsuits, cars that set themselves alight and the departure of its Chief Executive Officer and Chief Financial Officer earlier this week.
The electric truck startup first signaled trouble in May when the CEO at the time, Steve Burns, released a statement saying that the company had ‘encountered some challenges’ due to the pandemic.
Burns announced that the company would cut the years production goal in half from about 2,200 vehicles to 1,000 vehicles, according to CNBC.
In early June, Lordstown filed with the Securities and Exchange Commission saying it needed to raise more money and might not survive. It has $587 million in cash reserves, but said that was insufficient to start its high-tech production line.
Then on Monday Burns and CFO Julio Rodriguez resigned as the company acknowledged preorders for the Endurance were vague and could not be guaranteed to translate into actual sales.
The Endurance is claimed to have 600 horsepower, four hub motors, and a 250 mile range, all at a cost of under $55,000.
Lordstown Motors lost its two top bosses on Monday when Chief Executive Officer Steve Burns (left) and Chief Financial Officer Julio Rodriguez (right) resigned
Lordstown Motors’ share prices have continued to drop through the past year as the company may be facing several class-action lawsuits by investors who claim they have been defrauded
Lordstown reported losses of $125 million in the first quarter of 2021, and is facing stiff competition from more established rivals.
Last month, Tesla CEO Elon Musk boasted that the upcoming Cybertruck has more than 250,000 pre-orders. The wedge-shaped truck, modelled to look like something out of a sci-fi movie, has an entry-level price of $39,000 and is still slated to begin production later this year at Musk’s Giga factory near Austin in Texas.
Ford has also muscled in on the e-truck market. Its F-150 Lightning pickup truck, will be available in spring 2022 and will cost from $39,974 to about $55,000.
Lastly, GMC’s new five-seat Hummer EV SUV, which while have the ability to drive diagonally, is going for $105,595 and is set to debut in early 2023.
Other all-electric start-ups are also doing better than Lordstown. Rivian, based in Normal, Illinois, has been asked to build 100,000 electric delivery vans for Amazon, with the first 10,000 vehicles due to join the online delivery giant’s fleet by the end of 2022.
Workhorse in Cincinnati, Ohio, has hailed its C-Series electric van as a future contender in the electric vehicles market, but its factory has also been hit by staff shortages caused by a COVID outbreak. The firm must also win a large order from the United States Postal Office to guarantee its future.
Meanwhile, Lordstown is contending with a search for new leadership among other publicity concerns that began shortly after it became a publicly traded company through a merger with a special-purpose acquisition company (SPAC).
In January, a prototype of the Endurance pickup truck caught fire 10 minutes into its initial test drive in Michigan. In February, company shares began to drop and, the following month, the company failed to pay $570,000 in real estate taxes.
Around the same time, short-selling firm Hindenburg Research accused Lordstown of lying about the number of pre-orders the company claimed to have received for its flagship Endurance vehicle.
When it announced its deal to go public through a reverse merger last August, Lordstown said it had pre-orders for its Endurance pickup truck worth about $1.4 billion. But Hindenburg filed a report concluding that Lordstown’s figures did not seem likely.
‘After months of denials, Lordstown is finally beginning to acknowledge its precarious financial state and that its earlier production projections were nowhere close to reality,’ Hindenburg said a statement to CNN Business.
The report spawned four potential class-action lawsuits against Lordstown by investors who claim they were defrauded.
Lordstown responded to the Hindenburg report on Monday and said it conducted an independent investigation revealing the report to be ‘unsubstantiated.’ However, it acknowledged that one potential buyer that made a large number of preorders doesn’t appear to have adequate resources to make those purchases. Other preorders appear too vague or weak to be relied on, the company said.
In a quarterly regulatory filing, the company said that the $587 million it had on hand as of March 31 isn´t enough to begin commercial production of its full-sized electric pickup called Endurance
Lordstown introduced the public to the $52,500 electric pickup truck last May
The Endurance will have a range of 250 miles per charge, a towing capacity of 7,500 pounds, and peak horsepower of 600hp. Above designers are working with a clay model of the car
Specs released last May show that the Endurance will dispense with a traditional drive train in favor of using in-wheel hub motors that independently power each wheel