A day after the sacking of two top managers, the electric truck start-up Lordstown Motors said on Tuesday it was well on its way to start production in September, even if it does not raise additional funds, according to the securities regulators a week ago contradicts.
In a filing with the Securities and Exchange Commission last week, Lordstown said it needs to raise more money and may not survive. Founder and CEO Steve Burns and the company’s chief financial officer resigned on Monday.
But at a press conference hosted by the Detroit-based Automotive Press Association, the company’s new leadership team presented a far more optimistic outlook, without giving many details.
Lordstown President Rich Schmidt said the company will start producing trucks at its Lordstown, Ohio facility in late September and that it has enough money to last by May 2022. He said the company would be able to manufacture more than 15,000 trucks over the next 24 months.
He also said the company is still actively seeking new funding to increase production.
“It’s a new day at Lordstown Motors and it is and will not disrupt our plans to start production,” said the company’s new CEO Angela Strand. She previously served as Lead Independent Director on Lordstown’s board of directors.
Lordstown’s stock had risen to nearly $ 31 a share earlier this year but fell to about $ 7 in May after Mr. Burns admitted that the thousands of “pre-orders” the company had touted there were no binding orders. Some of the major orders that the company had announced also came from “influencers” who did not intend to buy the trucks themselves, the company announced on Monday.
Mr Schmidt, who joined Lordstown in 2019 after a stint at Tesla, said Tuesday that the company has “firm” orders for all trucks that the company is expected to place in 2021 and 2022. However, he declined to disclose the total. Name specific customers or indicate whether they have paid down payments to secure their orders.
“These are firm orders,” said Mr. Schmidt. “They were re-confirmed last week.”
Lordstown’s shares rose more than 10 percent on Tuesday.
He said production would begin in September, although the company’s endurance truck has not passed all of the crash and engineering tests required to be sold in the United States. Trucks rolling off the assembly line would be detained until the tests were completed and then modified if necessary before they were delivered to customers, a very unusual practice in the automotive industry.
Mr. Schmidt gave little details of what caused Mr. Burns to leave. About a dozen other senior executives were also laid off on Monday.
Lordstown caught its eye in 2019 when it agreed to buy a plant that General Motors wanted to close. The closure drew contempt from President Donald J. Trump, and GM sold the plant to Lordstown for just $ 20 million. Mr. Trump later received Mr. Burns at the White House.
Lordstown plans to manufacture a rugged, electric pickup truck for commercial customers such as mining and construction companies. Mr. Burns had hoped the company would become the Tesla of the pickup market. However, investors were concerned about Lordstown’s outlook after a small investment firm, Hindenburg Research, released a report in March that raised questions about interest in the company’s truck.