Lordstown Motors Says It Has No ‘Binding’ Orders for Endurance
LORDSTOWN, Ohio – Lordstown Motors Corp. on Thursday walked back statements made earlier this week by President Rich Schmidt that suggested the company had “binding” orders for its all-electric pickup, The Endurance.
Meanwhile, the company has postponed its first annual shareholders meeting, originally scheduled for today, until August 19.
Schmidt told reporters June 15 during a virtual media event hosted by the Automotive Press Association that the company had enough orders committed for the pickup to cover production from September 2021 through May 2022.
“Those are firm orders for those two years,” Schmidt said at the event. “They are basically binding orders – they are committed and over the last two weeks reconfirmed orders.”
The company tamped down Schmidt’s statements in a regulatory filing on Thursday, noting that while these agreements present an indication of demand, they “do not represent binding purchase orders or other firm purchase commitments.”
In addition, the company reiterated statements in its restated annual 2020 report released June 8 that it has engaged in limited marketing activity and has “no binding purchase orders or commitments from customers.”
Instead, the company clarified in its filing that although it has entered into vehicle purchase agreements with fleet management companies, “they do not commit the counterparties to purchase vehicles, but we believe they provide us with a significant indicator of demand for the Endurance.”
These agreements come with projected orders over three to five years, order procedures, down payment terms (generally 5% down 90 days before delivery date), invoicing and payment terms, and other provisions.
Either party can terminate the agreements at any time with 30 days notice, the company said.
Lordstown Motors said in the filing Thursday that it had entered into an agreement with Holman Enterprises’ fleet management affiliate, ARI, in which the company would use “reasonable efforts” to procure orders from its leasing clients.
Schmidt said during the media event that the company had enough orders to manufacture about 15,000 vehicles between September 2021 and May of 2022.
Investor confidence in the electric-vehicle startup has suffered over the last three months in the wake of a short-seller report published March 12 by Hindenburg Research that accused the company of fabricating “preorders” of the Endurance.
An independent investigation by the company’s directors disclosed Monday that public statements related to vehicle preorders made by company executives were inaccurate in some cases. However, the director’s report refuted Hindenburg Report’s other allegations related to Lordstown Motors’ ability to launch the Endurance and its technology.
Angela Strand, Lordstown Motors’ executive chairwoman, told the Automotive Press Association June 15 that the company is on track to begin limited production of the Endurance by the end of September.
Strand assumed the role of executive chairwoman after the abrupt resignation Monday of Lordstown Motors founder and CEO Steve Burns. Julio Rodriguez, the company’s chief financial officer, also resigned.
Becky Roof was named Lordstown Motors’ interim CFO, and Jane Ritson-Parsons was appointed chief operating officer, the company announced Monday.
Copyright 2021 The Business Journal, Youngstown, Ohio.