It’s hard out there for privately held startup OEMs trying to churn out untested zero-emission vehicles, even those that already have a gigantic factory previously owned by General Motors, an innovative battery-electric pickup design, and backing of the current U.S. administration.
That’s why Lordstown Motors Corp., like Nikola and Hyliion did earlier this year, is intending to merge with a special purpose acquisition company and slide onto the NASDAQ in an effort to get its fleet-focused Endurance pickup to the masses as early as next summer. The pickup will be built at the 6.2 million-square-foot Lordstown, Ohio, plant operated by GM from 1966 to 2019.
Lordstown Motors bought the plant last year. A video of the truck in various duty cycles was released last week.
Lordstown Motors will join with DiamondPeak Holdings Corp., keeping its name and gaining the ticker symbol RIDE when the deal presumably closes in Q4 2020. Both companies’ boards of directors already unanimously approved the proposed transaction.
Some highlights of the deal include:
- $675 million of gross proceeds of the transaction going to develop the Endurance and the hub-motor design
- $500 million fully committed in private investment in public equity (PIPE), with $75 million from GM (which includes some already provided in kind contributions)
- After the merger closes, Lordstown Motors will have Pro forma implied equity value of $1.6 billion
- Other investors include Fidelity Management & Research Company LLC, Wellington Management Company LLP, Federated Hermes Kaufmann Small Cap Fund, and funds and accounts managed by BlackRock
- Lordstown CEO Steve Burns and David Hamamoto, Chairman and CEO of DiamondPeak, will have positions on the Board of Directors
“We are thrilled with the opportunity to build Lordstown Motors into a top-tier electric truck company that is highly differentiated from the competition,” Burns said. “We are uniquely positioned to be a leader in the industry, with our first vehicle, the revolutionary Lordstown Endurance. Our all-electric full-size pickup truck delivers the equivalent of 75 miles per gallon and has been systematically engineered and competitively priced specifically for the large commercial fleet market, which includes companies in manufacturing, contracting, utilities, transportation and delivery, and agriculture, among others.”
Burns also said the Endurance, which was unveiled at the Ohio plant in late June, has garnered $1.4 billion of pre-orders, or 27,000 vehicles. The pickup is geared towards serving fleets.
The four in-wheel hub motors are expected to provide 600 HP, and the battery range is projected to be 250 miles. The 7,500-lb. towing capacity matches the Tesla Cybertruck’s single motor option. The Endurance has an expected price of $52,500. Factoring in tax incentives, the total cost of ownership could be $52,000.
Having the hub motors as the only four moving parts not only makes maintenance less complex versus a vehicle with an internal combustion engine that may have 2,000 moving parts, but is should simplify the manufacturing process as well. Burns stated that at full volume the plant could accommodate the construction of 600,000 Endurance trucks per year.
As with the several other zero-emission vehicle projects, ranging from light to heavy duty, the driving force behind this pickup’s future success will rest on increasingly stricter emission regulations and the availability of charging infrastructure. With more investment capital available to newer players in the space, it seems likelier that affordable, high performance options will exist for fleets sooner rather than later.
“Our platform is rooted in sustainability, and the entire Lordstown team is committed to ensuring we contribute to a healthier planet for generations to come,” Burns said.
