Embattled electric-pickup start-up Lordstown Motors (RIDE 1.18%) said today that its CEO Steve Burns and CFO Julio Rodriguez have resigned, after a report by the company's independent directors concluded that some of Lordstown's statements about its pre-orders were inaccurate.
A committee formed by Lordstown's independent directors examined allegations made by short-seller Hindenburg Research in March. The report concluded that while several of Hindenburg's allegations were without merit, the firm's most explosive allegations -- that Lordstown had exaggerated the number of pre-orders for its pickup, and that some of those pre-orders may have been made by small companies that don't operate fleets -- were valid.
The news is the latest in a series of developments that have shaken auto investors' confidence in the start-up, which is still hoping to begin deliveries of its electric truck to commercial-fleet customers this fall.
Lordstown warned in a regulatory filing last week that it might not have enough cash to stay in business for another year. The warning, a so-called "going concern" notice inserted by the company's auditors, came as a surprise to some investors who had thought the company had ample cash to ramp up production of its Endurance pickup truck.
Lordstown CEO Steve Burns, shown here last year with a prototype Endurance pickup, has resigned. New board chair Angela Strand will lead the company while it searches for a new CEO. Image source: Lordstown Motors.
That in turn followed the reveal of Ford Motor Company's (F -1.64%) electric F-150 Lightning in May. Compared to the Endurance, the Lightning offers a more extensive set of features tailored to fleet customers, at a lower price; that, plus Ford's already-dominant position in commercial-fleet sales in North America, makes it difficult to see a path for the Endurance to acquire meaningful market share.
Lordstown said that Angela Strand, an independent director and former Workhorse Group (WKHS -1.74%) vice president, will lead the company on an interim basis while it searches for a new CEO.
