The past month has been a rough one for some of the electric vehicle startups that went public by merging with special purpose acquisition companies, or SPACs. Lordstown Motors, Canoo and Electric Last Mile Solutions all have seen key personnel leave, and all three are under investigation by the U.S. Securities and Exchange Commission.
Lordstown lost Chuan Vo, a former Tesla engineer who was head of propulsion. That’s a pretty big job for an EV company. He was the one overseeing development of the electric drive system for the Endurance pickup that is supposed to go into production in the third quarter of this year.
EV startups are notoriously volatile, but at least in Lordstown’s case, the company is firming up a management team under Chief Executive Officer Dan Ninivaggi, a former Carl Icahn associate who joined in August after playing a role in the Chapter 11 restructuring of Hertz. Ninivaggi told me the turnover is part of a series of steps he’s taking as the company abandons founder Steve Burns’ vision of making EVs largely on its own.
“The team is totally different,” Ninivaggi said during a short interview when Vo left. “We’re bringing in new talent and we’re pivoting from a manufacturing company to a product-engineering company.”
The plan is to approach carmaking more like Apple makes phones. Lordstown will have Taiwan’s Foxconn build the commercial vehicles Ninivaggi’s team develops. Lordstown will design and engineer vehicles, while Foxconn owns the plants and pays the assemblers. For a startup in a capital-intensive business, getting someone with deep pockets and expertise in supply chains and manufacturing to do the heavy lifting makes sense.
The company agreed in September to sell its Lordstown, Ohio, factory — the one it bought from General Motors in 2019 — to Foxconn. The iPhone assembler will make the trucks while Lordstown develops future commercial vehicles, perhaps delivery vans, from an office in suburban Detroit.
In November, Ninivaggi hired former GM and Ford Motor executive Edward Hightower as president, replacing Rich Schmidt. Hightower led development of GM’s crossover SUV business, including the Cadillac XT5 and Chevy Blazer. Schmidt had been in manufacturing for Tesla and Toyota.
As for Vo, he sold stock in February of last year, then bought more shares that month at a lower price. Under trading rules, he had to refund the company the roughly $400,000 he netted by buying the shares after the value of the stock tanked. A spokeswoman for Lordstown said that’s not why he left — Vo wanted to return home to California. Plus, with the Endurance battery finished and any future products coming from Foxconn’s MIH EV platform, the company doesn’t really need someone to develop propulsion. Vo didn’t 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 they bought company stock before its merger at a discount to market value. Four Canoo executives parted ways this month. Both companies’ stocks are trading below the $10-a-share price investors in the SPACs paid to get in on the respective deals.
That’s true for Lordstown, too. Its shares have traded below $4. That’s the market’s way of saying investors want more proof that Ninivaggi’s plans, however sensible, will pan out.
