All the time, the Lordstown Endurance pickup – with its promised 600 horsepower quad hub engine system, £ 6,000 towing capacity and 250 mile range – is what attracts investors, including General Motors. GM raised $ 75 million last August after originally selling its old Chevy Cruze factory to Lordstown owners for a song. Of course, GM also announced a broad partnership with Nikola Motors shortly before Hindenberg did its business last fall.
Lordstown has publicly stated that it has 100,000 orders for the Endurance pickup, largely attributed to companies and municipalities that wish to purchase fleets of all-electric vehicles. One of those interested buyers is a company called E Squared Energy, whose business with Lordstown is in the books for 14,000 trucks worth $ 735 million; the report notes that the company appears to be run by two employees from a “small apartment in Texas” and highlights other potential customers who are said to “have no intention” of buying Endurance pickups.
“We are not claiming that they are orders and we have never stated that,” Burns told WSJ. He continued later: “If a guy signs a piece of paper that says ‘I think I can move x-thousand of them’, we believe him. But it’s not in the blood. It is a non-binding letter of intent. “
The report mentions other potential customers who allegedly “have no intention” of buying Endurance pickups. Hindenburg says the bulk of these allocations were made by consulting firms that Burns paid “$ 30 per non-binding ‘order’ to pump stocks and increase cash flow. Burns admitted that this happened, but reiterated that the company referred to this as “non-binding production reserves” in press releases and financial disclosures.
This is true, but it is also true that Burns and Lordstown constantly called them “orders” last year and were happy to let people think that it meant something beyond the possible interest of anyone who might want to place an order almost none electric pickup.
Burns himself did not escape Hindenberg’s network; the report cites former senior officials who immediately called him a “swindler” and compared him to PT Barnum. He was former CEO of the EV Workhorse startup, which he resigned in late 2019 to start Lordstown. Since then, he has promised thousands of jobs to the people of Lordstown, Ohio, who were probably hung up to dry after GM left his factory there and then sold it to a group led by Burns.
Although Lordstown has not yet responded to requests for comment from various media outlets, Burns elaborated the statements made at Hindenburg’s desk to calm investors. He says the company is still on track to build real pickups to production specifications this fall, following recent capital improvements for the plant, and insists that the potential electric car maker has never cheated its investors.
In terms of the production schedule of the Endurance truck, it has been postponed more and more since November 2019. Manufacturing was initially scheduled to begin in the fourth quarter of 2020, although in April last year Lordstown postponed it to January 2021, then September . A video posted to Lordstown’s social media accounts on March 10 showing an empty chassis undergoing off-road testing does little to give the impression that things are on schedule.
Hindenburg mentioned specific problems, including fundamental last-minute changes. A former employee allegedly said the startup “has completely switched from a plastic to aluminum exterior” to save weight on the Endurance pickup and, due to these supposed reversals, Lordstown is far behind in crucial vehicle tests.
Critically, another alleged problem point was the battery. Burns said earlier that all of Lordstown’s batteries would be manufactured in-house, although a former employee interviewed by Hindenburg says there is no such equipment to do so at the site. Instead, workers allegedly assembled the batteries by hand. This may explain why the company’s first road test ended 10 minutes later with a burning Endurance pickup prototype, as the report describes; Burns told the daily was caused by “human error during assembly”.
It is important to note that as an investigative short seller, Hindenburg benefits when stocks in the target company fall, and has published similar reports in the past for several startups, in addition to Nikola and Tesla. And there are genuine stakeholders behind the company who really want to make it work – that is, the good people of Lordstown, Ohio, who are counting on Lordstown Motors to bring back a wave of well-paid manufacturing jobs to the region. in difficulties. If these statements are true and everything is heading for disaster, the impacts will be felt far beyond the shareholders’ portfolios.
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