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Transportation startups starting to look desperate


Startup transportation and electrification companies never expected their shares to sink below a dollar. More than a psychological hit, such underperformance can lead to delisting from the Nasdaq, where most of them trade. The thinking goes that if a stock is held in such low regard, why does it deserve to take up an exchange seat?

TuSimple is on the clock to avoid such an indignity at the end of the month. The company said Thursday it is laying off an additional 300 employees on top of 350 let go in December. But the autonomous trucking software maker is far from the only startup in such a predicament. 

TuSimple CEO Cheng Lu has some laughs with employees in March in Tucson, Arizona. On Thursday, the company laid off 300 people. (Photo: TuSimple)

Commercial electric pickup truck maker Lordstown Motors (with shares at 30 cents), electric truck and hydrogen distributor Nikola (74 cents) and hydrogen fuel cell maker Hyzon Motors (49 cents), all face existential crises.

Share increase authorizations and reverse stock splits

While Nikola is hoping its shareholders will agree to a doubling of its authorized shares at the company’s annual meeting on June 7, Lordstown plans to ask stockholders Monday to approve its board executing a reverse stock split at a ratio of 1:3 to 1:15. If shares remain below $1, Nasdaq could remove the RIDE ticker from the exchange as soon as next Friday.

A reverse stock split, which is exactly what it sounds like, reduces the number of shares and theoretically raises the price. When autonomous truck software developer Embark Trucks executed a 1:20 reverse split in August, its share price immediately soared. But nothing really changed financially. 

In January, Embark effectively ran out of cash as the price of its split-enhanced shares fell. Embark laid off 70% of its workers. Its future is unclear, but its finances — boosted by a reverse merger with a special purpose acquisition company in 2021 — are in shambles.

End of the line for Lordstown?

Lordstown’s fundamental problem is its product: Its commercial electric pickup truck called Endurance is beset by quality issues. The hypercompetitive EV pickup market left little margin for error. 

Lordstown owes its existence — and perhaps its collapse — to smooth talking by founder Steve Burns. He got General Motors to sell its aging 6.2 million-square-foot assembly complex in northeast Ohio to him for a paltry $20 million in 2019. GM even held a mortgage and loaned Lordstown another $20 million to retool the former car-making plant. 

This was not altruism. GM had no new product to assign to the 56-year-old facility. It had drawn the ire of then-President Donald Trump, whose strong support in the Mahoning Valley helped him carry Ohio in the 2016 election. Trump’s tweets created a sense of urgency for GM.

Selling to Burns became the automaker’s solution. An incensed United Auto Workers union later that year staged a strike at GM for 40 days costing it $3 billion. Reversing Lordstown’s effective closing was a union demand.

Months passed before Burns found a SPAC sponsor in DiamondPeak Holdings. The 11-week period between the August agreement and the closing in October 2020 was lightning fast even during the height of the SPAC frenzy when hundreds of startups tied up with blank-check companies created specifically to find merger candidates.

Cashing in as Lordstown bleeds

Lordstown received $780 million in SPAC proceeds and Burns got 26% of the company’s shares. He cut a technology transfer deal with his former company, Workhorse Group, in exchange for 10% equity and royalty payments if Lordstown converted on Workhorse orders for an electric pickup it designed but never produced.

As Lordstown careened from crisis to crisis, including allegations of faking orders for the Endurance, Burns and his CFO resigned in June 2021. Securities and Exchange Commission and Justice Department investigations related to those allegations by short seller Hindenburg Research remain open.

Burns, meanwhile, began selling his shares as soon as his lockup expired in October 2021. He cashed out $61 million between November 2021 and this month, according to SEC filings. He still holds 7% of company stock.

The Business Journal Daily in Youngstown, Ohio, reported May 6 that Burns sold $2.43 million in Lordstown stock between March 8 and May 2, a period when the stock price fell below $1. 

Workhorse, meanwhile, cashed out its stake in Lordstown on the advice of veteran automotive supplier executive Rick Dauch, who became CEO of the electric van maker in August 2021.

Lordstown Motors founder Steve Burns has cashed out $61 million in company stock. (Photo: Lordstown Motors)

“If you wait till I get there, it may be too late, but I’d sell every share you’ve got,” Dauch told me in a recent interview on FreightWavesTV. “We put $106 million on the balance sheet.”

Lordstown and Foxconn squabble over $47 million

Meanwhile, Lordstown is trying to wrest $47 million from Foxconn, the Taiwan-based electronics manufacturer that invested $170 million of an agreed-upon $230 million to buy the plant and become the contract manufacturer of the Endurance.

Foxconn claimed in April that Lordstown violated the agreement when its share price fell below $1. Lordstown and Foxconn are at an impasse, according to a May 11 SEC filing.


Lightning eMotors pays big for access to capital

Electric truck conversion startup Lightning eMotors may get up to $50 million over the next 18 months from YA II PN Ltd., a Cayman Islands investment company that has put money into other electric transportation startups including Xos Inc.

But it won’t come cheap.

YA II PN gets Lightning eMotors stock at an 8% discount to its trading value and the Loveland, Colorado-based company could pay up to 15% interest if it defaults on the agreement. YA II PN also can require Lightning eMotors to issue and sell shares of common stock to cover a default. More details are in this SEC filing.


Volvo Trucks helps first responders see beneath electric truck’s skin

The high-voltage systems in an electric truck can be a mystery to a first responder in a crash. What to touch and how to do can be a matter of life and death.

Volvo Group is making it easier with an augmented reality safety system that lets rescue workers see beneath the truck’s skin.

The Emergency Response Guide app is available for free download from Android and Apple stores. It provides safety information for all Volvo Group heavy electric truck brands, including Volvo Trucks, Renault Trucks and Mack Trucks, which will be added in June.

“The new AR app is a powerful tool that can support the emergency services to quickly and safely secure the site, while minimizing the risk of injury to themselves and others,” Lars Stenqvist, Volvo Group chief technology officer, said in a news release.

A Volvo Group augmented reality app can help first responders to a crash see under the skin of an electric truck. (Photo: Volvo Group)

Briefly noted …

Cummins Inc. officially opens its first U.S. electrolyzer manufacturing plant Friday in Fridley, Minnesota. On Monday, it will cut the ribbon for a $452 million investment in its Jamestown Engine Plant in western New York. Jamestown will produce Cummins’ fuel-agnostic internal combustion engine platform.

Heartland Express took delivery this week of a Kenworth T680 Signature Edition with a 76-inch-high roof sleeper. It represented the 750,000th Kenworth Truck built at the company’s Chillicothe, Ohio, plant, which opened in 1974.

The Kenworth Truck Co. plant in Chillicothe, Ohio, built its 750,000th truck. (Photo: Kenworth)

Paccar’s next-generation Class 8 electric truck will show up first in the company’s DAF Trucks brand in Europe. Sweden-based autonomous teleoperations company Einride signed a letter of intent for 50 DAF XD electric trucks capable of up to 310 miles between charges. The first-generation Class 8 Peterbilt Model 579EV gets about 150 miles on a single charge.


That’s it for this week. Thanks for reading. Click here to get Truck Tech via email on Fridays. And watch Truck Tech on FreightWavesTV at 4 p.m. EDT Wednesdays.

Next week’s guest is Thomas Healy, founder and CEO of Hyliion Holdings. He’ll provide an update on Hyliion’s HyperTruck ERX that runs on natural gas that makes electricity and explain the next-generation Karno technology for the ERX that Hyliion purchased from General Electric.

Future of Supply Chain

JUNE 21-22, 2023 • CLEVELAND, OH • IN-PERSON EVENT


The greatest minds in the transportation, logistics and supply chain industries will share insights, predict future trends and showcase emerging technology the FreightWaves way–with engaging discussions, rapid-fire demos, interactive sponsor kiosks and more.



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