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UPDATED | No comment from Lordstown Motors on short-seller’s report; SEC now involved

Executives on Wednesday talked about "substantial" purchasing agreements for the all-electric Endurance, as well as its second all-electric vehicle, which is now being fast-tracked.
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Lordstown Motors Corp. CEO Steve Burns speaks outside the electric automaker's Hallock Young Road plant in this file photo from Wednesday, June 24, 2020. (Justin Dennis | Mahoning Matters)

LORDSTOWN — During its first earnings call with investors Wednesday, Lordstown Motors Corp. declined to address a damaging short-seller's report issued last week.

Though the company promised to refute the Friday report from Hindenburg Research — which called demand for its all-electric pickup truck, the Endurance, a "mirage" and suggested the company was years behind schedule in mass-producing the vehicle — CEO Steve Burns said the company's board of directors has formed a special committee to review the allegations.

The U.S. Securities and Exchange Commission has requested information from the company and it is complying, Burns said.

Burns assured investors the Endurance is still on-track to begin production in late September. He expects the company will produce an Endurance every six minutes later this year, and expects to later be able to finish a vehicle every four minutes.

The company intends to increase production capacity to put out 60,000 vehicles a year and expects to spend more this year to develop its own tools in-house, said President Rich Schmidt.

The company now employs nearly 500 workers — some of whom are former General Motors workers, former union representatives said — expected to be about 1,000 by the end of the year, Burns said.

Currently, the plant is manufacturing 57 beta vehicles, expected to be finished by the end of the month, which will be used for testing and given to early customers for test drives.

“We are extremely excited and proud to be so close to delivering our first beta vehicles, which we believe should solidify and spur customer demand and commitments,” Burns wrote in a release to investors.

Lordstown Motors has touted more than 100,000 non-binding pre-orders for Endurance vehicles — the same pre-orders Hindenburg reported as “largely fictitious” promotional hype. With beta vehicles reportedly rolling off the line, the company expects to be able to nail down "more substantial" purchasing commitments from customers and is working on arrangements with fleet operators for 25,000 units, Burns said.

“At this stage in our evolution, the arrangements must be conditional because we won’t have the product until later this year,” he said.

A market study commissioned by Lordstown Motors estimated the demand for commercial fleet vehicles at 2.5 million units per year, according to an investors presentation released Wednesday. There are an estimated 30 million light-duty pickup trucks on U.S. roads today, Burns said.

"We see no reason the vast majority of those trucks shouldn't be electric over time," he said.

Retooling work remains “on track” at the company's 6.2-million-square-foot plant, the former General Motors Lordstown Assembly Complex, Schmidt said.

Burns promised the 800,000 square-foot propulsion manufacturing line currently being installed would be the second-largest of its kind in the country, behind Tesla Inc.’s. That line will produce the battery packs and hub motors for the Endurance.

The company also announced it's ramping up work on its second product, an all-electric van with a 350-mile range marketed toward recreational users and sold through Camping World, as part of its recently announced partnership. That van is expected to be unveiled this summer and hit production in the second half of next year, Schmidt said.

“Our commitment to developing multiple zero-emission vehicles at an affordable price to underserved market segments is a near-term goal,” Burns is quoted in his statement to investors. “Longer-term, we believe we could be a disruptive force in the automotive industry with platform expansion and investments in multiple electric vehicle technologies that complement our evolution as a company.”

Shares of Lordstown Motors Corp. (NASDAQ: RIDE) rallied more than 5 percent from a midday slump to close Wednesday at $15.12. During after-hours trading, shares fell nearly 4 percent after the investor call began.

Bragar Eagel and Squire, P.C. is another law firm now gathering participants for a potential class-action lawsuit against Lordstown Motors following the Hindenburg report, which alleges the company has “no revenue and no sellable product,” causing shares to drop 17 percent on Friday. The firm announced Tuesday it’s investigating potential claims on behalf of Lordstown Motors shareholders.

Rosen Law Firm of New York City has also reached out to Lordstown Motors investors. That’s the same firm that filed a class-action lawsuit against Cincinnati-based Workhorse Group, alleging the company oversold its chances at a $6.3-billion U.S. Postal Service contract to develop its new line of fleet vehicles.

 



Justin Dennis

About the Author: Justin Dennis

Justin Dennis has been on the beat since 2011, covering crime, courts and public education. Dennis grew up in Poland and Salem and studied journalism and communications at Cleveland State University and University of Pittsburgh.
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