Washington, DC (CNN)A small Ohio automotive startup is drawing national attention for its new electric pickup truck. If the vehicle, Lordstown Motors‘ first and only product, proves to be a hit, it could reshape the auto market and help revive a languishing Rust Belt town. But questions linger about whether the newcomer can deliver on its goals.
Lordstown Motors revealed on Thursday the Endurance, a $52,500 pickup that’s designed for commercial fleets. At an event featuring Ohio VIPs and national politicians, Vice President Mike Pence rode in the passenger seat of the Endurance as it drove on stage. US Secretary of Energy Dan Brouillette spoke at the event. A Goodyear Blimp flew overhead the plant.
“It’s a big day for Lordstown,” Mayor Arno Hill told CNN Business. “We’re very excited. We might have a few tough years, but we should be okay.”
Founded in 2019, Lordstown Motors has drawn broad attention almost out of nowhere. It has a long way to go to prove it can live up to the fanfare it has received and compete with automakers, like Tesla, that currently dwarf it in size.
Hill estimated that 60% of Lordstown’s tax revenues were lost as a result of the closure.
In November 2019, GM sold the plant to Lordstown Motors, a startup spun off from Workhorse, a company that is developing electric delivery vans and had its own electric pickup truck project in the works. Workhorse CEO Steve Burns exited to start Lordstown Motors, and customers who pre-ordered a pickup with Workhorse were given the option to transfer their order to Lordstown Motors.
A Lordstown Motors spokeswoman said the Endurance is a completely new vehicle that was built from scratch.
The startup has a little over 100 employees and 150 contractors today, according Burns. In 2016, GM employed more than 3,000 hourly workers at the Lordstown plant. Prior to its closure last year, that number had dwindled to 1,400.
Lordstown is trying to raise $450 million, which Burns said is enough to launch Endurance production at a rate that’s profitable. He declined to say how much the company has raised to date. Lordstown Motors has received a $40 million loan from GM, according to public records from the Trumbull County Recorder.
The startup joins an increasingly crowded field of companies trying to electrify pickup trucks, which are the best-selling vehicles in the US.
Burns said he thinks Endurance can differentiate by being first to market with a full-size pickup that’s designed specifically for commercial fleets. He said deliveries will begin in 2021, if the company secures funding.
The Endurance has more conservative stylings than California-based Tesla’s Cybertruck, which Burns expects will appeal to fleet buyers.
Both Burns and Pence spoke on Thursday of a future in which Ohio might lead the nation in electric vehicles.
“The name of this small town is going to be on trucks all across the country,” Burns said. “We thought, ‘Why should California have all the fun? We think our people can do the same thing or even better.'”
Pence, who spent more time speaking at the unveiling than Burns, called Thursday “a new day of leadership in electric vehicles in the United States.”
The pickup truck is powered by four motors that are located in the wheels. In-wheel motors, known as “hub motors,” are common in electric bicycles and scooters, not larger cars and trucks. Many companies have shown off concept vehicles featuring in-wheel motors, but Lordstown Motors wants to be the first to actually bring one to market.
“Conventional wisdom says it just can’t be done because it hasn’t,” Burns said. “The end result, contrary to conventional wisdom, is a pickup truck that handles like a sports car.”
Sam Abuelsamid, an electric mobility analyst with Guidehouse, a consulting firm, said there aren’t any mainstream hub motor vehicles because automakers think the negatives outweigh the positives.
“It’s not going to handle like a sports car,” said Abuelsamid, adding that the Endurance would be fine on smooth surfaces, but that drivers would feel potholes more than in a vehicle with traditional wheels.
Another downside of hub motors is that they tend to wear out more quickly than motors mounted inside the car. Wheels tend to hit bumps and get jostled more than any other part of a car, making in-wheel motor placement unappealing for many manufacturers, Abuelsamid said.
An advantage of hub motors is that they free up more space in the vehicle for other uses.
Lordstown Motors will also have to prove it can launch production of a vehicle with a smaller budget than typical development costs in the auto industry, which can reach $1 billion for a single vehicle. GM, for example, invested $200 million in 2015 just to pay for new tooling and equipment in plants making the electric Chevrolet Bolt.
Burns said Lordstown Motors will save on costs by re-fashioning GM equipment left in the plant from when it made the Chevrolet Cruze.
“It’s been fantastic, everything is working,” Burns said. “We’re super pleased with the functionality of the plant.”
Lordstown Motors has also benefited from shared technology from Workhorse, according to Burns. Workhorse owns 10% of Lordstown Motors, he said.
GM has the option to rebuy the plant from Lordstown Motors through August, according to public records from the Trumbull County Recorder. A GM spokesman said that the company wouldn’t be using the re-purchase clause if Lordstown Motors raises sufficient funds to begin production, as the startup would then be able to pay off its mortgage.
“We have no intent for GM to repurchase this plant,” Burns said. “There’s some legalese that positions it that way, but that isn’t the intent of anybody.”