Lordstown Motors loses CEO and CFO days after warning of cash crunch

Lordstown Motors on Monday announced that Chief Executive Officer Steve Burns and Chief Financial Officer Julio Rodriguez have left the company.

The electric-vehicle startup said it is on the lookout for replacements but in the meantime has appointed independent director Angela Strand as executive chairman to lead the company during the search for a new CEO, and Becky Roof as interim CFO. Lordstown President Rich Schmidt will continue to oversee all day-to-day operations, the company said.

It’s now been a year since Lordstown unveiled its Endurance battery-electric pickup truck, and the new announcement comes after the company’s warning last week that it is unlikely to start production without fresh investment.

Lordstown Motors CEO Steve Burns in assembly plant

Lordstown Motors CEO Steve Burns in assembly plant

Lordstown, which only last October went public via a SPAC deal, said in a filing with the Securities and Exchange Commission that it doesn’t have the cash to start production of the Endurance and has warned that it might not be able to stay in business over the next 12 months. According to the filing, Lordstown had $259.7 million in cash as of March 31 and had posted a loss of $125.2 million in the three months prior to the date.

Lordstown also said in the filing that it still needs to complete development of its pickup, including obtaining regulatory approval. The company’s last update on production pointed to a start date of late September. Lordstown plans to build the Endurance at a former General Motors plant located in Ohio, which it acquired in 2019.

At the time of writing, Lordstown’s shares, which trade on the Nasdaq, dived 16% to $9.60. That’s down from the high the shares hit last September.

Lordstown Endurance

Lordstown Endurance

The latest news comes after famous short seller Hindenburg Research in March issued warnings about the credibility of claimed pre-orders for the Endurance pickup. This is the same company that made warnings about rival EV startup Nikola last year, leading to Trevor Milton, Nikola’s founder and chairman at the time, stepping down.

In a response issued on Monday, Lordstown conceded that its statement that its pre-orders were from, or “primarily” from, commercial fleets, was inaccurate, and that some commitments appear too vague to be counted as pre-orders.

Should Lordstown manage to get the Endurance into production, the company will be faced with more hurdles. Ford has just unveiled an electric version of its top-selling F-150 pickup that is priced from a very reasonable $39,974, or roughly $12,500 less than what Lordstown said it will charge for its own pickup. Chevrolet is also close to unveiling an electric version of its top-selling Silverado, and then there’s the other electric pickups like the Tesla Cybertruck and Rivian R1T to compete with.

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