Lordstown Motors Corp. (LMC) will unveil the commercial fleet-focused Endurance electric pickup truck next week even as a deadline looms to raise hundreds of millions of dollars to convert a closed General Motors Co. (NYSE: GM) small car plant to full-size electric truck production.
GM holds a $40 million mortgage, allowing LMC to operate while it seeks investors. LMC, led by former Workhorse Group (NASDAQ:WKHS) CEO Steve Burns, paid $20 million for the 6.2 million-square-foot assembly complex in northeast Ohio.
LMC has said the conversion could cost $450 million. A financial update will be part of the Endurance reveal on YouTube next Thursday, Burns told FreightWaves on Friday.
Lordstown, located in the industrial Mahoning Valley, was a key factor in Donald Trump’s Ohio win in the 2016 election. As GM in late 2018 declared it had no future product for Lordstown, Trump criticized GM CEO Mary Barra and urged her to assign a product there. Trump preempted GM’s announcement of the sale to LMC by tweeting the news.
Mortgage extended
Documents filed Monday with the Trumbull County (Ohio) Recorder’s office show that GM has until Aug. 31 to decide whether to buy back the plant it sold to LMC in November. The initial deal called for the option to expire May 30, according to the Youngstown Business Journal.
Separately, GM is building a $2.3 billion battery-cell manufacturing plant next to its former Lordstown facility.
The extension gives Burns more time to raise capital. GM operated the Lordstown plant from 1966 until it built the last Chevrolet Cruze compact car there in March 2019.
GM negotiated the plant closing with the United Auto Workers (UAW) as part of a settlement following a 40-day strike in September and October 2019. If GM takes back the plant, it would be just the property and buildings, not the union workforce, since the plant was officially closed.
“To the best of my knowledge, they still haven’t raised any money yet,” said Sam Abuelsamid, principal analyst with Guidehouse. “I have yet to see any evidence that they’ve begun retooling that factory.
“The videos they have posted on their website show their CEO walking around the factory that looks pretty much the same as it did when GM rolled the last Cruze off the line,” he told FreightWaves.
LMC and Workhorse
Burns, who left Workhorse in February 2019, leased the intellectual property for the Workhorse W-15 electric pickup originally revealed in 2017. Workhorse received a 10% ownership stake and will receive a royalty on the first 200,000 pickups LMC sells.
Workhorse itself is focused on launching battery-electric composite body delivery vans called the C-Series from a plant in Union City, Indiana.
Making the battery-electric commercial pickup was too much for Workhorse to take on given its own tight finances and focus on the delivery vans, Workhorse CEO Duane Hughes said.
Workhorse is a finalist for a portion of a $6 billion U.S. Postal Service (USPS) contract to build the next-generation delivery vehicle. Those trucks, using the components of the pickup, would be built by LMC at the former GM plant. The USPS has delayed awarding the contract as it struggles with its own financial problems.
Endurance progress
LMC is partnering with a company that makes in-wheel hub motors and that has agreed to produce the components in the Lordstown facility. On Wednesday, LMC said Califoirnia’s Hydra Design Labs would create the interior and exterior of the truck as well as computer-aided design (CAD) surfacing, scale modeling and full-size prototyping.
“Our goal with designing the Endurance was to create a rugged platform that could deliver on the demands of fleet-duty pickup,” said Jon Hull, Hydra founder and president. “We were able to leverage the layout of the electric drivetrain to explore unique new design solutions.”
LMC has several letters of intent with potential customers for the electric pickups, including a potential order of 1,200 units from SERVEPRO, a fire and water restoration company servicing counties in Ohio and Pennsylvania. Clean Fuels Ohio has signed on to help educate and encourage fleets to purchase the Endurance.
“We understand LMC has had productive discussions with both customers and prospective investors, and we continue to support their efforts to begin building the Endurance pickup truck,” GM spokesman Jim Cain said.
Fierce competition
LMC faces fierce competition in electric pickups from better-established competitors, including GM and Ford Motor Co. Startup Nikola Motor will begin taking orders for a battery-electric pickup called the Badger, and electric vehicle leader Tesla is considering Texas for a plant to make its angular Cybertruck.
“I think [LMC] they can build a truck to show off on YouTube or even at a live event,” Abuelsamid said. “I’m not aware of any of the pieces falling into place that needs to happen to actually start large-scale production. Until I see evidence otherwise, it’s vaporware.”