Lordstown Motors CEO: ‘Now, We Have to Execute’ Production Plan

By Dan O’Brien & Jeremy Lydic 
LORDSTOWN, Ohio – The new CEO of Lordstown Motors Corp. says he’s watched the electric-vehicle startup closely since its inception, and is convinced the company has what it takes to compete in the expanding EV market.

“When Lordstown Motors first came out, I said ‘Wow, that’s impressive,’” Daniel Ninivaggi, told The Business Journal in an interview Aug. 26. “I like the hub motor design, they’re going into the right part of the market with the right product, and they’ve got the benefit of the Lordstown plant.”

Ninivaggi was named CEO that morning, replacing Angela Strand, executive chairwoman, who acted in that office in an interim capacity.

“I’ve been in the auto industry for most of my life, I’m a Detroit guy,” he says. “I like the fact that they’re going right to the pickup market, fleets in particular.”

Lordstown Motors plans to move forward with limited production of its all-electric pickup, the Endurance, in late September. The plan is to manufacture vehicles for validation and regulatory approval in December and January and begin commercial delivery during the second quarter of 2022.

The company operates out of the former General Motors Corp.’s Lordstown Assembly plant, which Lordstown Motors purchased in November 2019.

“We want to make sure we can hit it,” Ninivaggi says. “If there are ways to accelerate it, we will. But we have to have a successful launch. We won’t sacrifice speed or the number of units for quality.”

The new CEO says the company is focused on the fundamentals of the business – primarily gaining customer acceptance of the vehicle.

“At the end of the day, it’s about proving you have a good product that can get to market,” he says. “We have an innovative design and a great team. Now, we have to execute.”

Ninivaggi’s appointment sparked renewed confidence among investors in the electric-vehicle startup. Before the bell sounded on the morning of his appointment, publicly announced at 7 a.m. that day, Lordstown Motors, which trades under the ticker symbol RIDE, saw its stock rise 20%.

Trading opened Aug. 26 at $6.67 and hit a high of $7.79 around 10 a.m. before closing the trading day at $6.49 per share, a 17.79% gain from the previous day’s trading. Volume was also extremely high – 137,228,700 shares.

Ninivaggi assumes control of the company at a critical time as Lordstown Motors navigates the fallout from a turbulent spring and summer. In March, Lordstown Motors was the target of a short-seller report that alleged company executives misled investors by exaggerating the number of preorders it had secured.

Founder and CEO Steve Burns resigned from the company in June, as did Chief Financial Officer Julio Rodriguez. That same month, Lordstown Motors issued a “going concern” notice in an amended financial report and indicated it may not have enough cash to remain in business through May of next year.

Moreover, the company subsequently confirmed the U.S. Department of Justice and the U.S. Securities and Exchange Commission have launched investigations into the company.

“Distractions over the summer derailed the company to some extent, but it didn’t distract the people making the product,” Ninivaggi tells The Business Journal. “The whole group has been focused on designing the product, improving the product, getting it to production, and getting it launched.”

A successful launch would also open up opportunities for additional investment in the company. In July, Lordstown Motors announced that it had secured a line of credit with a hedge fund managed by Yorkville Advisors for $400 million.

Under his employment agreement, Ninivaggi will earn an annual base salary of $750,000 and will be eligible for an annual bonus equal to 125% of his base salary. As CEO, he will receive an award of 700,000 stock options with an exercise price equal to the closing price on the business day immediately following his effective date.

He will also receive 700,000 restricted stock units, which will vest on each of the first, second and third anniversaries of the grant date.

According to the employment agreement, Ninivaggi is authorized to continue serving as chairman or member of the board of directors for Garrett Motion Inc. and on the advisory board of Metalsa, provided those duties don’t interfere with his duties as CEO of Lordstown Motors.

Ninivaggi is the former CEO of Icahn Enterprises L.P., a diversified holding company controlled by Carl C. Icahn, and has served in a variety of senior leadership positions in the automotive and transportation industries. He began his automotive career at Lear Corp. and is former co-chairman and co-CEO of Federal Mogul Holdings Corp.

“We have to figure out where we play in the electric vehicle landscape,” he says of Lordstown Motors. “The good news is that it’s wide open.”

Ninivaggi knows the EV truck market is growing competitive, but emphasizes there’s enough demand to accommodate several producers in the space.

“Our design is different,” he says. “Demand will be strong enough for multiple automakers to win. Right now, we think we have a very feasible and sound production plan.”