Lordstown Motors Corp.
RIDE -4.36%
said in a securities filing that although it has struck vehicle-purchase agreements with fleet-management companies, the agreements don’t represent binding purchase orders.
The clarification on Thursday comes after the troubled electric-truck startup’s president told reporters Tuesday the company had “pretty binding” preorders and enough interest from potential buyers to sustain factory output through the end of 2022.
Shares were down about 1% Thursday morning. The company’s stock rose after its president’s comments and closed Tuesday having gained 11.3%.
The Ohio-based company said in its filing that building relationships with specialized trucking and fleet-management companies to incorporate its debut model, the Endurance, into their programs is an essential sales and marketing strategy.
“They do not commit the counterparties to purchase vehicles, but we believe that they provide us with a significant indicator of demand for the Endurance,” Lordstown Motors said of the vehicle-purchase agreements.
Lordstown Motors and several rival electric-vehicle challengers have experienced a reversal of fortune in recent months, going from being among Wall Street’s hottest investments to targets of short sellers, financial regulators and critics doubting their futures.
In March, the company said it struck agreements with an affiliate of the dealership group Holman Enterprises to co-market and co-develop business opportunities. The pact also includes a co-marketing agreement involving Lordstown Motors and Holman’s leasing and fleet-management services arm, Lordstown Motors said.
Lordstown Motors said the vehicle-purchase agreements generally include a term of three to five years, a designation of Lordstown as the preferred supplier and down payment terms, which are usually 5% down 90 days before the requested delivery date.
Earlier this month, the company warned it didn’t have enough capital to start commercial production and that there were doubts it could continue operations for another year. The company’s two top leaders resigned unexpectedly after a new report from a board committee found inaccuracies in parts of the company’s disclosures on truck preorders. On Thursday, Lordstown Motors said it tapped
John Whitcomb,
most recently the managing director for global automotive and mobility at Ernst & Young LLP, as its vice president for global commercial operations.
Mr. Whitcomb, who also served as
General Motors Co.
’s director of global retail and sales technology, will oversee Lordstown Motors’ go-to-market strategy ahead of the start of the production of Endurance in late September, the company said.
Write to Dave Sebastian at [email protected]
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Appeared in the June 18, 2021, print edition as ‘Lordstown Clarifies Nonbinding Orders.’
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