Electric Truck Startup Lordstown Motors Now Claims it Has No Binding Truck Orders
【Summary】After announcing that Lordstown Motors has “binding” orders for all of its trucks until 2022, the automaker is now taking those claims back, filing a report with the SEC that states it doesn’t have any binding purchase orders.
Saying that Lordstown Motors is having a rough time is a massive understatement. Last June, the automaker unveiled its all-electric Endurance pickup truck. The vehicle looked promising, but since then, things have been going downhill. This year, Lordstown Motors warned that it was running out of money, which was shortly followed by the CEO and CFO of the company resigning. Now, the automaker is coming under fire for its truck orders.
What Happened To Orders
Earlier this week, on the same day the automaker's CEO resigned, the company stated that a potential buyer that committed to a large number of preorders didn't appear to have the necessary resources to finalize the purchase. Additionally, other preorders weren't strong enough to be considered actual purchases. A day later, Lordstown Motors' President Rich Schmidt told the media that the automaker had "binding" preorders for the all-electric Endurance pickup truck that would carry the brand into 2022. This seemed like a curious statement to make, as the automaker had previously stated that it was running out of money.
A few days later, Lordstown Motors backtracked on its statement. In new regulatory filings, the automaker took back Schmidt's public statements, stating that purchase agreements "do not represent binding purchase orders or other firm purchase commitments." The automaker went on to explain that it has "engaged in limited marketing activities and we have no binding purchase orders or commitments from customers."
Apparently, the preorders for its fleet pickup truck were from "influencers" who "did not intend to purchase Endurance trucks directly." Despite this major setback, Lordstown Motors states that it still has thousands of fleet preorders for the Endurance pickup truck.
Lordstown Motors Has Serious Problems
Previously, Lordstown Motors claimed that it had more than 100,000 preorders worth a total of $1.4 billion. In a quarterly regulatory filing, the automaker claimed that the $587 million it had on hand at the end of March wasn't enough to begin production of its commercial truck.
Lordstown Motors' problems highlight a major issue new automakers are having — turning a concept into production. While new companies come out with the hopes of challenging traditional automakers, few can actually deliver.
The automaker gained attention because it purchased a shuttered General Motors factory in Lordstown, Ohio. The brand was also one of the first to come out with an electric pickup truck concept. But General Motors, Ford, and Rivian all have pickup trucks coming out in the next few years, while Lorstown Motors is still struggling with getting funding. Analysts, journalists, and investors have been invited to the company's factory later this month to discuss work on the Endurance truck, but the news is probably going to be grim.
Vineeth Joel Patel
Joel Patel has been covering all aspects of the automotive industry for four years as an editor and freelance writer for various websites. When it comes to cars, he enjoys covering the merger between technology and cars. In his spare time, Joel likes to watch baseball, work on his car, and try new foods
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