Lordstown Motors CEO Resigns Following Months of Turmoil at EV Startup
The company’s CFO also resigned, which doesn’t seem great.
No other electric vehicle startup has had the success of Tesla, although it seems like a new harbinger of our electric future appears to show us the light every few months. Lordstown Motors—named after a former GM assembly plant in Lordstown, Ohio that the fledgling automaker purchased—is one of these startups. Founded in 2018, the company hasn't had an easy life, especially as of late. There's been a prototype fire, Lordstown has admitted it doesn't have the cash to start production, and Nikola-killing short-seller Hindenburg Research has publicly accused the startup and its now-former CEO Steve Burns of fraud.
Today, the company announced the resignation of Burns—who's also Lordstown's founder and is pictured above with former President Donald Trump—along with its CFO, Julio Rodriguez. Lordstown is already publicly traded thanks to a SPAC merger, and shares of the company plummeted 13 percent following the announcement.
The company went public back in October of 2020 with an estimated valuation of $1.6 billion. Since February of this year, shares of the automaker have been sliding down steadily due to bad news on multiple fronts. As mentioned previously, Lordstown has publicly admitted it doesn't have the cash to start production of its electric pickup truck, the Endurance. It's also been accused of exaggerating the number and nature of orders it received for the truck. This accusation was first made formally by the now well-known short-seller Hindenburg Research.
One of Hindenburg's posts all but destroyed the Nikola Motor Company after providing strong evidence suggesting that the company committed fraud. The small automaker's questionable deal with GM fell through, its stock price plummeted, and now it's in the strange limbo of being a publicly traded automaker that has never made a production vehicle. Nikola's CEO Trevor Milton also resigned following allegations of fraud and sexual assault, among others. This all happened very quickly, within a matter of weeks.
Lordstown's fall from grace has happened only a bit more gradually. In March, Hindenburg's report was released and the automaker's value continued on the downward trend it had been experiencing since February. Then, news of a prototype that caught fire surfaced around the same time another failed to get anywhere close to finishing a 250-mile off-road rally. Late in May, the company said it would have to cut down its production plans in order to get vehicles rolling off the line; that was followed by the news that it needed a cash infusion to make any trucks.
With production seeming more and more unlikely by the day, the announcement that Burns and Rodriguez are departing the company is almost unsurprising. While Lordstown has been struggling, legacy automakers have been taking serious interest in the electric pickup space. Ford unveiled its F-150 Lightning and Chevy has plans to show off its electric Silverado soon. Other automakers like Stellantis will undoubtedly follow with electrified versions of its Ram pickups.
With Burns and Rodriguez out, they have been replaced by acting replacements. Becky Roof, who has served as an interim CEO at several other corporations, is now acting CFO, and the company's lead independent director, Angela Strand, has been appointed executive chairwoman.
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