Edward Hightower wants to save the ailing electric start-up

The company did not want to produce lifestyle products for millionaires like its competitor Rivian, but a real workhorse. A large, heavy-duty truck, the Endurance was designed to convert plumbers, roofers and other hard-working Americans who depend on a large truck bed to electric mobility.

In 2020, the company went public with the help of a new type of financial vehicle, a so-called spac. Lordstown raised $675 million. In September 2020, founder Steve Burns introduced the Endurance to the White House.

Then-US President Donald Trump hailed the car as “an incredible piece of science and technology.” Lordstown was seen as a beacon of hope. After all, Burns had promised to secure jobs in Ohio in the impoverished industrial region. It was an ambitious plan. Then a lot went wrong.

Criticism from short sellers – entry by Foxconn

In March 2021, the analysis house Hindenburg, which was betting on a stock crash, published a devastating report. Hindenburg accused Lordstown of having lied to investors about the number of pre-orders and the state of its own technology. The SEC determined.

Lordstown initially denied all allegations, but had to admit in June 2021 that they did not have enough cash to start production and might be facing bankruptcy. Two months later, Burns left the company and Hightower took over. “The allegations are a thing of the past,” he says today. Previous plans would not have worked. “Now we are concentrating on the future and the implementation.”

Hightower brings 25 years of experience in the auto industry, including positions as chief engineer at Ford and GM. In the fall of 2021, he engineered a deal with the Taiwanese contract manufacturer Foxconn: Foxconn invested 170 million dollars in fresh money and took over the factory in Ohio. In return, Foxconn wants to see results.

Hightower has set a production target of 500 endurance trucks to prove their concept. Only 31 trucks left the factory in 2022, mostly handcrafted with the help of Croatian bodywork experts.

Lordstown still makes a loss with every vehicle. “The material cost of an Endurance is higher than its retail price,” confirms Hightower. You have to bring the vehicles onto the market so that customers recognize their value. “But we can only become profitable through size, through economies of scale,” he says.

Lordstown is looking for partnerships

The market is hotly contested. According to registration statistics, around two million pick-up trucks were sold in the USA in 2022. The F-Series from Ford is unbeaten in first place: the carmaker sold almost 654,000 units; the electric variant, the F-150 Lightning, has already sold 15,600 units – and 200,000 pre-orders.

The Chevrolet Silverado from GM and the Dodge Ram from Stellantis, which are now also pushing into the market with fully electric variants, came in second and third. In addition, there is the start-up Rivian with more than 100,000 pre-orders and Tesla’s Cybertruck, which is to be delivered from the end of the year. Volkswagen also wants a piece of the cake with the revived Scout brand.

>> Read also: A new plant for the electric brand Scout – Volkswagen’s big pick-up bet starts

“Size is key,” says Hightower. The only way to keep costs down is to place large orders with suppliers. He has issued a new strategy: Instead of going it alone like Rivian, Lordstown wants to go into mass production through a partnership with a major automaker, a logistics company, or another corporation that can bring in fresh funding.

“Any vendor who sees the value of working together, anyone who doesn’t have a facility in North America, is welcome,” said Hightower. Partners from Europe are also possible. The trucks could then appear under a different brand.

Another manufacturer would have to invest two billion dollars to get an electric pickup on the market and plan at least four years. “With our help, the route is shorter,” says Hightower. After all, Lordstown has the necessary platform, technology and team – and thanks to low fixed costs, can start cheaply. After all, the most expensive asset, the factory, belongs to Foxconn.

However: Hightower has not yet found the necessary strategic partner. “We’re in talks,” he says curtly.

Problematic production stop

Another problem is pressing: At the end of February, Lordstown announced that production and delivery had been paused since January due to performance and quality problems. 19 vehicles also had to be recalled.

“We will announce in the next few weeks when we will resume production,” says Hightower. There was a problem with a high voltage battery connection. The defective component from a supplier was found and replaced. The same applies to a parking brake component that could fail over time. “We have eliminated all problems.”

Investors are desperate for good news. Shares are down 44 percent year-to-date to a record low of $0.58. In 2020 they were still at 29 dollars. The major bank Goldman Sachs advises to sell.

Top managers of the competition express skepticism behind closed doors that Lordstown will still find a financially strong partner. And even independent observers like Guidehouse analyst Sam Abuelsamid are not very optimistic. “Every supplier in the market who builds a full-size truck is developing their own platform anyway,” he says.

GM has them, as do Ford and Stellantis, and even Toyota is developing an electric truck platform. “Nobody has a good reason to go to Foxconn or Lordstown.”

Other once-hyped electric start-ups have already had to give up, including the van company Electric Last Mile. Hightower, on the other hand, is combative: Even as a child he loved cars, and at the age of eleven he took over the oil change on the truck of his boy scout troop.

Today’s challenges will also be mastered. “Lordstown has capital until the end of the year,” says the company boss. The time is running.

More: Lucid, Nikola and Lordstown miss production targets