Securities and Exchange Commission Has Questions About Lordstown Motors | News, Sports, Jobs
LORDSTOWN – The U.S. Securities and Exchange Commission has requested information from electric truck start-up Lordstown Motors Corp. in light of a scathing short sellers report last week that accused the company of misleading investors.
Company founder and CEO Steve Burns briefly acknowledged the March 12 report from New York-based Hindenburg Research during the company’s first earnings conference call on Wednesday, saying the board of directors of Lordstown Motors had formed a special committee to look into the matter.
He said the company is cooperating with the SEC investigation but declined to comment further until the special committee has completed its review.
Lordstown Motors share – traded on the Nasdaq stock exchange under the ticker “DRIVE” – was down 0.85% in regular trading to close Wednesday at $ 15.09 a share before the call, which was held after the market closed.
The report from Hindenburg, a financial investment research firm known for its short stocks, alleges Lordstown Motors misled investors about pre-orders for its battery-powered truck, the Endurance. He also characterized the business as a mirage.
Wednesday’s call to announce the company’s fourth quarter and full year 2020 financial results revealed that it had a net loss of $ 101 million last year and had $ 630 million in cash. at the end of 2020.
The company goes into production in September. It’s in the process of making beta prototypes, the first of which is expected to roll off the production line in about a week. After that, the company plans to produce one beta per day for the next 57 days for crash and durability testing and validation.
“We plan to do an endurance every six minutes when we start production this year and progress to an endurance every four minutes next year.” Burns said.
“We expect our first-to-market advantage to allow us to meet pent-up demand from pickup truck users across the country who are fed up with around 16-17 mpg and want a bigger truck. eco-friendly.”
The company plans to spend $ 250 million to $ 275 million this year to expand the plant’s capacity to manufacture 60,000 vehicles per year to meet the greater than expected interest in the truck and accelerate the the company’s second vehicle, a high-end van intended for sale through Camping World.
Lordstown Motors has already entered into an agreement with Camping World to provide nationwide service and a network of Endurance parts through its subsidiary Good Sam.
The pickup, built on the same skateboard chassis as the Endurance, is said to be four-wheel drive and has a target range of 350 miles. A demo version of the van is expected to be unveiled this summer with production next year.
“We are also building our own Lordstown gas stations in areas where we anticipate the greatest pool of demand, at least initially is California and the Midwest in general,” Burns said. “To this end, we recently obtained our first reseller license to sell directly in California, and we also opened our first sales and service center in Irvine, California, which also houses our design team which focuses on flexible clothing for our on-board systems. . “
Part of the investment is also earmarked for additional tools to retain internal components to create a five-star classified vehicle in the event of an accident and for higher supply chain costs linked to the viral outbreak.
Already, the company has received a five-star crash rating on computer simulations and “I think software validation will translate well into real world testing”, Rich Schmidt, chairman of Lordstown Motors, said.
In addition, the battery pack and hub motor production lines at the 6.2 million square foot plant, the former General Motors assembly plant, are being installed, Schmidt said. .
Burns also addressed the Jan. 13 fire of an endurance test mule on his maiden voyage to Farmington Hills, Mich., A suburb of Detroit where Lordstown Motors has a satellite research and development center. .
The truck was destroyed.
Burns said the cause was linked to “human error” in the assembly of the hand-built truck.
“Of course, we fixed that. I don’t want to dismiss it, but I want to say that in this electric vehicle industry it does happen. Thermal really needs to be watched closely, so we feel really good with this learning and a lot of other learning ”, Burns said. “We have third party validators testing the battery now just in case we miss anything.”
The company is also going through the process of applying to the US Department of Energy for at least $ 250 million under a program that helps the auto industry develop more efficient vehicles.
The government, Burns said, is exercising its due diligence on the request. Lordstown Motors, however, appears to have met the criteria for a loan.
“That we pull on it is almost like a line of credit that we can draw on when needed.” Burns said. “We don’t know if we will.”
If the company does, “Maybe we would use it to move additional vehicles faster, the third vehicle maybe, but we’ve been going through all the processes with them and have been working with them for some time.”