Rust Belt upstart Lordstown Motors set to make Nasdaq debut

LORDSTOWN, UNITED STATES (AFP) – Could a new Tesla-like upstart be the saviour of a once-mighty Ohio steel region ravaged by deindustrialisation?

Lordstown Motors has lofty ambitions for its flagship Endurance electric pickup truck to lead the way.

The new company is poised to begin trading on Nasdaq on Monday with the ticker symbol “RIDE,” after shareholders on Thursday cleared a merger between Lordstown Motors and DiamondPeak Holdings.

The timing could be just right as Lordstown makes its stock market debut at a time when investors are bullish on electric autos.

The company boasts 40,000 pre-orders for the envelope-pushing Endurance, and a prototype was recently displayed at the White House.

But success is far from guaranteed. Besides the challenges of scaling any new product, analysts cite heavy competition in the electric pickup category, as well as a drag from the coronavirus crisis.

Startups always face scrutiny, but Lordstown chief executive Steve Burns expressed confidence the company would hit its targets.

CEO of Lordstown Motors Steve Burns unveils their new electric pickup truck Endurance in Lordstown, Ohio. PHOTO: AFP

“It’s really turned a corner,” Burns told AFP earlier this month.

Burns, former chief of Workhorse Group, launched Lordstown Motors in November 2019 and acquired a plant shuttered by General Motors (GM) in March of that year.

“This is a factory town and the factory shut down,” he said. “We’re not just bringing jobs, we’re bringing new jobs. This is the future. Electric is the future.”

The region is also home to a seasoned manufacturing workforce. The Mahoning Valley has lost more than 35,000 manufacturing jobs since 1990, according to United States (US) data.

The Endurance is a full-sized pickup, like Ford’s best-selling F-150 line, and able to tow up to 7,500 pounds (3,400 kilos). It resembles conventional pickups much more than Tesla’s space-age “Cybertruck.”

“We wanted to have a conventional pickup, but with flair,” Burns said. “If it doesn’t look right, it won’t sell.”

One innovation in the battery-fuelled vehicle is the use of motors in the vehicle’s four wheels.

The pickup will retail for USD52,500, which will be reduced by up to USD7,500 by US tax credits.

Lordstown Motors is targeting production of 31,000 vehicles in 2022, he said.

Under the new deal with DiamondPeak, a special purpose investment vehicle, Lordstown Motors will have USD675 million in financing, which Burns said is enough to enable it to reach commercial production and become cashflow positive.

The company already has hired 200 people and should have 800 by the time it begins commercial production in September 2021, Burns said.

The workforce could number “up to more than 2,000 hourly workers” down the road, according to a securities filing.

While the new company’s arrival has been applauded, some question whether the new jobs will pay as well as the former USD30-an-hour GM jobs.

The company’s founder said he is open to having a union, but “we will pay competitively with or without a union.”

Burns was on hand in September when the pickup was displayed at the White House. United States (US) President Donald Trump, who blasted GM for closing the Ohio plant, praised the truck as “incredible.” Vice President Mike Pence has visited the plant.

Officials in Lordstown said they are hopeful the Trump administration will announce before the election a massive new US Postal Service contract with Burns’ former company, Workhorse, to build next generation vehicles.