GM moves forward with Lordstown factory sale
The startup hopes to build millions of electric pickups in the factory.
General Motors is apparently moving forward with the proposed plan to sell its shuttered Lordstown, Ohio, assembly plant to prospective EV builder Workhorse.
The factory will be owned by a new entity, Lordstown Motors Corp (LMC), that is part-owned by Workhorse and headed by Workhorse founder and former CEO Steve Burns, along with other Workhorse executives. The company has not explained exactly why it created an entirely new corporation for the Lordstown purchase, though it presumably shields Workhorse from risk if the endeavor ultimately collapses.
The deal has been shrouded in politics and criticized as a "PR stunt," taking pressure off General Motors for closing the factory that once employed more than 4,000 workers when it built the Chevrolet Cruze.
Workhorse has several products in the pipeline including all-electric cargo trucks, a manned eVTOL aircraft, an autonomous delivery drone and fleet telematics software. In each of the segments, there are already large established corporations working on competing products. Workhorse's website no longer shows a page for its W-15 all-electric pickup, suggesting the LMC entity has been created for the truck under the rebranded name Endurance.
"GM is committed to future investment and job growth in Ohio and we believe LMC's plan to launch the Endurance electric pickup has the potential to create a significant number of jobs and help the Lordstown area grow into a manufacturing hub for electrification," GM said in a statement.
Potential contracts with USPS or private shipping companies initially appeared to be the only Workhorse products that seemed to justify purchasing a 6.2-million-square-foot assembly plant. Workhorse has not yet announced any such large-volume contracts, however, delivering only samples to FedEx and competing with several rivals for the USPS contract that will not be decided until next year. The pickup will likely be viewed as even more of a long-shot in terms of commercial viability, competing directly against Tesla's upcoming truck, Rivian's R1T, the all-electric Ford F-150, and even General Motors' own promised full-size electric pickup.
Burns previously admitted that retooling the idled plant to build EVs will require hundreds of millions of dollars. It is unclear if any investors have lined up to provide the capital.
The shift toward electric vehicles is littered with numerous failed or stalled EV startups including Faraday Future, Coda, Fisker, and Detroit Electric, among others. Fisker did manage to launch the plug-in hybrid Karma -- thanks to $2 billion in funding -- but still faltered. Dyson is returning to its focus on vacuum cleaners after recently dropping plans to spend $2.7 billion to build an EV, deciding that the project was not financially feasible, despite already having patent filings and 600 workers on the project.
LMC's electric pickup has only been presented as a rough sketch, suggesting the project is not nearly as far along as other battery-powered pickups under development. The startup is focused on building its truck for commercial fleets, apparently seeing a niche, however the established players are undoubtedly planning to engage the same pool of buyers.
The startup says its Endurance pickup eliminates the need for portable generators and will be the first production vehicle with a four-wheel-drive hub-motor system, which is claimed to benefit from simplicity and "less cost." Hub motors are not a new idea and have been featured in many EV concepts from various automakers. The promising technology looks great on paper but has been consistently rejected for production EVs. It is unclear if LMC has quietly resolved lingering issues related to unsprung weight, long-term durability, performance and other considerations that have likely discouraged mainstream adoption.
In any case, LMC claims the Endurance pickup will enter production in late 2020.