The past month has been a rough one for a number of electric vehicle startups that have listed by merging with special purpose acquisitions, or SPACs. Lordstown Motors, Canoo and Electric Last Mile Solutions have all seen key personnel leave and all three are under investigation by the US Securities and Exchange Commission.
Lordstown has lost Chuan Vo, a former Tesla engineer head propulsion. That’s a pretty big job for an EV company. He is overseeing the development of the electric powertrain for the Endurance pickup, which is expected to enter production in the third quarter of this year.
EV startups are notoriously volatile, but at least in Lordstown’s case, the company is consolidating a management team under CEO Dan Ninivaggi, a former associate of Carl Icahn , who joined in August after playing a role in Hertz’s Chapter 11 restructuring. Ninivaggi told me the revenue is part of a series of steps he’s taking as the company abandons founder Steve Burns’ vision of making its own electric vehicles.
“The team is completely different,” Ninivaggi said in a brief interview as Vo left. “We’re bringing in new talent, and we’re moving from a manufacturing company to a product engineering company.”
The plan is to approach the auto industry the same way Apple makes phones. Lordstown will be built by Taiwan’s Foxconn commercial vehicle Ninivaggi’s team grows. Lordstown will design and build the cars, while Foxconn owns the factories and pays the assemblers. For a startup in a capital-intensive business, it makes a lot of sense to get someone with deep pockets and deep supply chain and manufacturing expertise to do the heavy lifting.
In September, the company agreed to sell the plant in Lordstown, Ohio, which it acquired Synthetic engine in 2019 – to Foxconn. The iPhone assembler will make vans while Lordstown develops future commercial vehicles, perhaps delivery trucks, from an office in suburban Detroit.
In November, Ninivaggi hired former GM and Ford Engine CEO Edward Hightower as chairman, replacing Rich Schmidt. Hightower leads the development of GM crossover SUV business, including Cadillac XT5 and Chevy Blazer. Schmidt used to produce for Tesla and Toyota.
As for Vo, he sold shares last February, then bought more shares that month at a lower price. According to the trading rules, he must repay the company about $400,000 he earned by buying shares after the stock’s value declines. A Lordstown spokesman said that’s not why he’s leaving – Vo wants to return home to California. Plus, with Endurance the battery Perfection and any future product coming from Foxconn’s MIH EV platform, the company doesn’t really need someone developing the propulsion. Vo did not respond to an email seeking comment.
Other EV startups have seen executives depart amid SEC probes. Van maker Electric Last Mile Solutions CEO Jim Taylor and Chairman Jason Luo left after the board determined that they had purchased stock in the pre-merger company at a discount to the price. market value. Four Canoo executives parted ways this month. Shares of both companies are trading below the $10 a share price that investors in the SPAC paid to enter into the respective trades.
The same is true of Lordstown. Its shares have been trading below $4. It’s market parlance that investors want more proof that Ninivaggi’s plans, no matter how plausible, will work.
