Electric Truck Startup Lordstown Motors Gets its First Order From Utility Company FirstEnergy

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【Summary】Electric truck startup Lordstown Motors already has a customer its first vehicle—a fully-electric pickup. Electric utility company FirstEnergy has agreed to buy 250 Endurance pickup trucks from the company.

Eric Walz    Apr 03, 2020 12:15 PM PT
Electric Truck Startup Lordstown Motors Gets its First Order From Utility Company FirstEnergy
A rendering of the Lordstown Motors fully-electric Endurance pickup.

Electric truck startup Lordstown Motors already has a customer for its first vehicle—a fully-electric pickup. Electric utility company FirstEnergy has agreed to buy 250 Endurance pickup trucks from the company. The Akron, Ohio-based company plans to add the Endurance pickup trucks to its existing fleet.

"Over the past couple of months, we have worked to better understand the needs of local residents and businesses," Lordstown Motors CEO Steve Burns said in a statement. "The ultimate goal is to continue to prioritize relationships, like the one we've developed with our partners at FirstEnergy, which drive innovative developments for this community."

Lordstown Motors is targeting commercial customers for its electric truck. The truck features a unique four-wheel-drive hub-motor system with the electric drive motor embedded into the wheel, which reduces the number of moving parts and reduces maintenance costs over the vehicle's lifetime, the automaker said. The truck is priced at $52,500.

Outside of the auto industry, not many people heard of Lordstown Motors until news broke that the company purchased the shuttered General Motors assembly plant in Lordstown, Ohio for $20 million in Nov 2019. 

GM closed the plant last year after the company discontinued the Chevy Cruze sedan that was built there, in order to focus more on SUVs and crossovers which are very popular with U.S. consumers. 

GM first opened the Lordstown complex in 1966.

Rather than let the plant sit idle, GM agreed to loan Lordstown Motors Corp up to $40 million to retool the plant and get it ready for electric vehicle production, so the startup could begin its own ambitious plan to begin building it first electric pickup there by the end of 2020.

In January, Reuters reported that Lordstown Motors was seeking an additional $200 million loan from a U.S. Energy Department program to further ready the factory for production of the Endurance, Burns told Reuters. 

A bipartisan group of Ohio lawmakers wrote to Energy Secretary Brouillette in January offering "strong support" for the loan to Lordtown Motors, saying northeast Ohio was dealt a "severe blow" by the plant closing and the new company will bring jobs to the region.

"We think we are worthy of government help. We don't want a handout - we want a loan," Burns said to Reuters in an interview in January. "It's just going to be more jobs faster if we get it. We are viable without it."

The funding would come from the Energy Department's "Advanced Technology Vehicles Manufacturing" (ATVM) program. The ATVM was part of the Energy Independence and Security Act of 2007. The ATVM provides access to debt capital that is priced at U.S. Treasury rates for auto manufacturing projects in the U.S. However, Lordstown Motors has not applied for the government loan as of two weeks ago.

After the recession in 2009, the program awarded loans to automakers Ford Motor Co, Tesla and Nissan to retool factories to build advanced vehicles, such as fully-electric models. To date the program has loaned automakers $8 billion. However the government program has not issued any new loans to automakers since 2011. 

GM's Lordstown plant was put in the national spotlight after President Trump publicly denounced GM for closing the plant and displacing 1,600 workers in a region hit hard by a decline in U.S. manufacturing jobs. President Trump called out General Motors chief executive Mary T. Barra on Twitter about the planned closure.

In a March 2019 tweet, Trump wrote "I am not happy that it is closed when everything else in our Country is BOOMING," he said on Twitter. "I asked her to sell it or do something quickly."

Lordstown Motors is working to raise additional funding and is in advanced talks with a large strategic investor, Burns said to Reuters in January. Burns said that his company hopes to repay GM's loan "in a few weeks."

Electric trucks are a hot new focus in the auto industry lately. Their gas counterparts have been the most profitable segments for both GM and Ford and now startups like Rivian and Lordstown Motors are emerging as strong competitors. Even electric automaker Tesla is entering the highly competitive truck segment with its upcoming Cybertruck.

Electric truckmaker Rivian is well-funded. The company is backed by Amazon and Ford and plans to build an electric pickup truck starting in late 2020. GM plans to build its first electric pickup truck starting in late 2021. GM also resurrected the Hummer as an electric brand. The first Hummer model will be a fully-electric truck under the automaker's GMC truck division.

Tesla plans to start building its electric Cybertruck in late 2021.

Burns said to Reuters that Lordstown Motors plans to start crash-testing vehicles in July 2020, hiring about 400 hourly workers in September and to begin production by the end of the year.

Lordstown Motors hopes to unveil a driveable, production version of the Endurance pickup at the Detroit auto show in June.

resource from: Reuters

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