Ohio-based Lordstown Motors, founded in 2018 intending to be the maker of America’s first all-electric commercial pickup truck, lacks the necessary cash to begin commercial production and may go out of business within the next 12 months, the company announced on 8 June.
“The company believes its current level of cash and cash equivalents are not sufficient to fund commercial scale production and the launch of sale of such vehicles,” the company stated in a federal filing last week. 
“These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year.”
Lordstown’s share price fell 16 percent on the news of the company’s possible failure to end 8 June at $11.22.
On Monday, 14 June, CEO Steven Burns and CFO Julio Rodriguez resigned from the company, effective immediately. Lordstown’s share price then lost another 15 percent, dropping below $10 a share.
The would-be truck maker has lost about half of its market value this year.
Endurance, Lordstown Motors’ first model, was scheduled to begin production in September, using $675 million it received through its merger with the Diamond Peak special-purpose acquisitions company (SPAC).
The merger left the company valued at about $1.6 billion.
The company will not push back its target date for production.
Instead, the company filed an application with the U.S. Securities and Exchange Commission to issue up to 2.3 million shares of Class A common stock.
Lordstown also may be hoping to raise additional money through the federal government’s Advanced Technology Vehicle Manufacturing Loan program, Jon Arnold, principal of J. Arnold Wealth Management Co., speculated to the Youngstown, Ohio, Business Journal
“They’re hoping by issuing common stock and [accessing] the federal loan program, they might have enough cash to stay in business,” he said. “That’s a big ‘might’.”
While the federal program could bring the company as much as $200 million, a basic requirement of applicants is that they “be financially viable without further assistance.”
Lordstown Motors was among several electric-vehicle and battery start-ups that raised money last year by merging with SPACs.
Companies planning to merge with SPACs can tout rosy, unsubstantiated projections about their future; companies that have filed applications with the Securities and Exchange Commission to issue stock are not allowed to do so.
Hindenburg Research, a noted short-seller, targeted Lordstown recently, claiming that it had overstated its number of pre-orders and progress toward commercial production.
TREND FORECAST: As we noted in “Electric Vehicles to Kill Gas Powered Cars? Don’t Bet on It” (19 July, 2017) and “Electric Cars Stalling” (5 November 2019), the speed at which EVs will pass gas-powered vehicles has been oversold.
As we have said before, until a more advanced battery technology or new power generating source is invented for electric vehicles, EVs will continue to hold a minor share of the automobile marketplace.
We again forecast that EVs will become truly popular among consumers only after a breakthrough in long-range battery technology has been proven and begins appearing in the cars themselves. 

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