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The Ford F-150 frunk might be as good as it’s going to get for electric trucks this year.
Both the CEO and the CFO of Lordstown Motors, an electric vehicle startup, resigned
yesterday. Their departures, combined with the company's admission last
week that it was almost out of cash, sent the company's share price
down 19% and plunged the automaker into crisis mode.
The backstory
After it
bought a shuttered GM plant in Ohio in 2019, Lordstown and its
futuristic trucks gave a jolt of optimism to the battered auto industry
in the Midwest. Then-President Trump touted the company for creating manufacturing jobs, and Lordstown became an important talking point during the 2020 presidential campaign.
- Last
year, Steve Burns, founder and now the former CEO, helped drive the
company public via SPAC, one of many electric automakers to go public by
merging with a blank-check company.
- Investors,
eager to find the next Tesla, were wowed by Lordstown's impressive
number of preorders and plans to start production on its electric truck,
Endurance. Lordstown stock climbed more than 200% last summer.
But earlier this year the short-seller Hindenburg Research accused Lordstown
of inflating its preorder numbers and massaging its production targets
to look good for investors. A new report from a board committee
confirmed some of those allegations.
Sound familiar?
A Hindenburg investigation
also led to the departure of executive chairman Trevor Milton at
Nikola, another electric truck startup that went public via SPAC. Plus,
the SEC is looking into electric van startup Canoo, whose CEO also resigned in April.
What's going on? The
electric vehicle industry is brutally competitive, and startups are
hitting the highway before they have their learner's permit. Being a
public company adds another layer of pressure they may not be ready for.
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