Saving Lordstown: an electric van startup tries to revive a former GM plant

Lordstown Motors on Thursday unveiled Endurance, a $ 52,500 truck designed for commercial fleets. At an event with Ohio VIPs and national politicians, Vice President Mike Pence climbed into the Endurance passenger seat as he took the stage. United States Secretary of Energy Dan Brouillette spoke at the event. A Goodyear blimp flew over the plant.

“It is a great day for Lordstown,” Mayor Arno Hill told CNN Business. “We are very excited. We could have difficult years, but we should be fine. “

Founded in 2019, Lordstown Motors has caught a lot of attention almost out of nowhere. That It has a long way to go to demonstrate that it can live up to the fanfare it has received and compete with automakers, such as Tesla, which are currently downsizing it.

For the town of Lordstown, today is a long way from March 2019, when GM closed the plant that had opened in 1966. and that it had 12,000 employees at its peak.

Hill estimated that 60% of From Lordstown tax Revenue was lost as a result of the closing.

In November 2019, GM sold the plant to Lordstown Motors, a startup derived from Workhorse, a company that is development of electric delivery vans and had its own electric truck project in the works. Workhorse CEO Steve Burns came out to start Lordstown Motors, and customers who pre-ordered a pickup with Workhorse had the option to transfer their order to Lordstown Motors.

A spokeswoman for Lordstown Motors said the Endurance is a brand new vehicle that was built from scratch.

The startup has just over 100 employees and 150 contractors today, according to Burns. In 2016, GM employed more than 3,000 hourly workers at the Lordstown plant. Before it closed last year, that number had dropped to 1,400.

Lordstown is trying to raise $ 450 million, which Burns said is enough to launch Endurance production at a rate that is profitable. Refused to say how much the company has raised to date. Lordstown Motors received a $ 40 million loan from GM, according to public records from the Trumbull County Registry.

The startup joins an increasingly crowded field of companies trying to electrify trucks, which are the best-selling vehicles in the U.S.
Ford and GM are developing electric trucks. Tesla revealed its Cybertruck last year. Rivian, an electric vehicle startup that raised nearly $ 3 billion, has its own recovery in the works.

Burns said he believes Endurance can differentiate itself by being the first on the market with a full-size truck that is specifically designed for commercial fleets. He said deliveries will start in 2021, if the company raises funds.

CEO Steve Burns believes that Lordstown Motors will beat its competition in the market.

The Endurance has more conservative styles than Tesla’s California-based Cybertruck, which Burns hopes will appeal to fleet buyers.

Both Burns and Pence spoke Thursday of a future in which Ohio couldt leading the nation in electric vehicles.

“The name of this small town will be on trucks across the country,” Burns said. “We think, ‘Why should California have so much fun? We believe that our people can do the same or even better. “

Pence, who spent more time speaking at the presentation than Burns, called Thursday “a new day of leadership in electric vehicles in the United States.”

Vice President Mike Pence speaks at the launch of Endurance.

The truck is powered by four motors that are located on the wheels. Wheel motors, known as “hub motors,” are common on electric bikes and scooters, not larger cars and trucks. Many companies have shown concept vehicles with wheel motors, but Lordstown Motors wants to be the first to launch one on the market.

“Conventional wisdom says it just can’t be done because it hasn’t been done,” Burns said. “The bottom line, contrary to conventional wisdom, is a truck that drives like a sports car.”

Sam Abuelsamid, an e-mobility analyst at Guidehouse, a consulting firm, said there are no major motor vehicles because automakers believe the negatives outweigh the positives.

“It won’t work like a sports car,” said Abuelsamid, adding that the Endurance would be fine on smooth surfaces, but that drivers would feel more bumpy than in a traditional wheeled vehicle.

Another drawback of hub motors is that they tend to wear out faster than motors mounted inside the car. Wheels tend to hit bumps and push more than any other part of a car, making engine placement on the wheel unappealing to many manufacturers, Abuelsamid said.

An advantage of hub motors is that they free up more space in the vehicle for other uses.

Lordstown Motors hopes to deliver its electric van in 2021.

Lordstown Motors will also have to demonstrate that it can launch production of a vehicle on a budget smaller than typical development costs in the auto industry, which can reach $ 1 billion for a single vehicle. GM, for example, invested $ 200 million in 2015 just to pay for new tools and equipment at the plants that make the electric Chevrolet Bolt.

Burns said Lordstown Motors will save costs by redesigning the GM equipment left at the plant since the Chevrolet Cruze was manufactured.

“It has been fantastic, everything is working,” Burns said. “We are very satisfied with the functionality of the plant.”

Lordstown Motors has also benefited from Workhorse’s shared technology, according to Burns. Workhorse owns 10% of Lordstown Motors, he said.

GM has the option to rebuild the Lordstown Motors plant until August, according to Trumbull County Recorder’s public records. A GM spokesperson said the company would not use the buyback clause if Lordstown Motors raises enough funds to start production, as the startup could pay off its mortgage.

“We have no intention of GM buying this plant back,” Burns said. “There is a certain legal jargon that positions it that way, but that is not anyone’s intention.”