The automotive industry is an incredibly difficult business to be in. The amount of money that is required to design, engineer and develop a modern vehicle is a monumental figure even for legacy manufacturers like Ford, GM, and Stellantis. That said, the push towards electrification has seen the birth of a ton of new automakers looking to make their mark on the electric vehicle-ridden future. While folks like Tesla and Rivian appear to be on stable footing thanks to massive investment from Wall Street, the same can’t be said for every stock market hero. According to a new report from Bloomberg, Lordstown Motors’ CEO and CFO both resigned from their roles as of this morning amid a desperate financial outlook related to their Endurance pickup.
Lordstown Motors CEO, CFO Resign
Lordstown Motors confirmed this morning that CEO Steve Burns and CFO Julio Rodriguez resigned effective immediately, as tensions surrounding the automaker reached an all-time high. This announcement comes just one week after the automaker warned investors that they might not have the capital to actually develop their Lordstown Motors Endurance pickup truck, and that their doors may close within 12 months. Lordstown Motors has further stated that Angela Strand will serve as executive chairman until a new CEO is chosen. Becky Roof has also been selected to come aboard and serve as the interim finance chief during these tough times.
Lordstown’s share price tanked by as much as 20 percent during pre-hours trading following the announcement, and it remains down near $9.26 at the time of writing this article. Not exactly promising for a company that needs as much capital as it can get its hands on. Back in October, Lordstown Motors signed on with DiamondPeak Holdings in a move that brought the automaker $675 million USD. But analysts have voiced that the company likely needs as much as $2.25 billion USD just to remain solvent until 2025, which is when the company could break even if it manages to hold on for that long.
Lordstown is just one of many new electric vehicle manufactures to go public as of late, joining the wave of insane financial benefits brought on by SPAC acquisitions. Many of these deals have not gone will, with their respective shares sinking not long after IPO. Look no further than Canoo’s SPAC IPO ($GOEV), or Lucid ($CCIV). Both are well off their record highs from last year.
“We remain committed to delivering on our production and commercialization objectives, holding ourselves to the highest standards of operation and performance and creating value for shareholders,” Strand said in the statement.
Future Of Lordstown Motors Isn’t Bright
So then the future of Lordstown Motors isn’t looking too bright. Even if the new electric vehicle automaker survives, the Lordstown Motors Endurance will have plenty of stiff competition to battle against. The Ford F-150 Lightning, Tesla Cybertruck, Rivian R1T, and GMC Hummer EV are just a few of the products the Endurance will have to coerce buyers away from. Combine the current situation with the past SEC probe related to dishonesty from the automaker, and customers may choose to not get involved at all. For now however, we’ll just have to wait and see.