Lawmakers Seek Exemption to Let Lordstown Motors Sell Direct to Customers
YOUNGSTOWN, Ohio – Two Ohio lawmakers plan to introduce legislation that would allow Lordstown Motors Corp. to sell its electric trucks directly to its customers instead of through a dealership network.
Ohio State Sen. Michael Rulli, R-Salem, and Ohio State Rep. Mike Loychik, R-Bazetta, said the bill would award Lordstown Motors an exemption from selling its all-electric pickup, the Endurance, through third parties.
Lordstown Motors’ general counsel Tom Canepa joined Rulli and Loychik during a press event at the Ohio State House in Columbus on Wednesday. Lordstown Motors’ CEO Steve Burns offered his comments at the event via a recorded video.
“Electric vehicles are not like traditional car sales,” Rulli said. “We need to support Ohio built, Ohio strong, Ohio endurance.”
Rulli said the legislation is tailored specifically to Lordstown Motors and no other electric-vehicle manufacturer. “We need to pivot from the past and we know that EV is the future.”
In 2014, the Ohio Automotive Dealers Association reached a deal with Tesla that would allow the electric-vehicle manufacturer to operate and own three dealerships across the state. The agreement, however, prohibited all other automobile manufacturers from direct sales to customers.
That year, the Ohio General Assembly approved the measure, limiting direct sales to customers to just three locations.
Rulli said that the measure did not disrupt dealership activity throughout the state. Likewise, a carve-out for Lordstown Motors would not impact any dealerships in Ohio, he said.
“We’re a fleet company,” said Chris Kerzich, director of government relations at Lordstown Motors, noting that such customers purchase in larger quantities and are therefore price conscious.
Allowing Lordstown Motors to bypass the traditional dealer network would allow the automotive startup company to be more competitive in that market. “We need the flexibility to sell directly to customers,” Kerzich said.
He also said that the new design of the Endurance is unique to the industry, and maintenance and training would be required for its fleet customers – training that Lordstown Motors is in the best position to provide.
In response, the president of the Ohio Automobile Dealers Association, Zach Doran, issued a statement on behalf of the states independent new car and truck dealers.
“Ohio’s time-proven system of independent and locally-based auto dealers has been fueling local economies and serving consumers for decades,” he said.
“Major auto manufacturers, including those with a large Ohio presence such as Honda, Ford, Chrysler and GM, operate successfully within this system. These manufacturers are also investing heavily in the development and production of electric vehicles, and these vehicles are currently and will continue to be sold by Ohio’s independent auto dealers.”
Doran concluded his statement by saying the dealers association ‘[looks] look forward to working with the General Assembly to ensure a thorough understanding of the economic, consumer, and community benefits of Ohio’s longstanding system of independent, locally-based new car and truck dealers.”
Inside Lordstown Motors’ factory, the former General Motors assembly plant in Lordstown, work continues to retool the facility to produce the Endurance, billed as the first all-electric pickup for the commercial market.
CEO Burns said during a video presentation that robotic welding on beta models starts today at the plant. “We’re up to about 500 employees now and heading toward 1,500 employees by September,” he said.
Preproduction models are slated for production this summer. The company is expected to begin full production of the vehicle in September.
Lordstown Motors has entered an Endurance beta “skateboard” – essentially the wheeled chassis for the pickup – in the 2021 SCORE International San Felipe 250, part of the SCORE World Desert Championship race series. The 290-mile single loop race will be held in San Felipe, Baja California, Mexico on April 17.
The Endurance is a full-size, all-electric pickup that has a range of 250 miles, the equivalent of 600 horsepower and can tow up to 7,500lbs. The initial Endurance is a crew cab configuration with medium bed length, priced at $45,000 after federal rebate.
A beta prototype of an Endurance pickup caught fire during a road test last month in Michigan. No one was injured and Burns has said production schedules remain on track.
So far, the company has received more than 100,000 non-binding preorders for the Endurance.
Copyright 2021 The Business Journal, Youngstown, Ohio.