Lordstown Deathwatch: Another Unflattering SEC Filing Emerges

Matt Posky
by Matt Posky
lordstown deathwatch another unflattering sec filing emerges

We’ve got more bad news about Lordstown Motors. Following several volleys of bad mojo ending with the departure of its upper management, the EV startup has informed the Securities and Exchange Commission (SEC) on Thursday that it doesn’t have any binding purchase orders or commitments.

That’s not what the company was saying several months ago. Hell, that wasn’t even what it said earlier this week when President Rich Schmidt told the Automotive Press Association the company had enough orders to support two years of production. Since the ability to sell automobiles is a somewhat relevant factor in an automaker’s long-term success, we’re getting concerned that Lordstown isn’t long for this world.

While we cannot say if the company will break its promise of delivering its all-electric Endurance pickup by September, automakers (including the well-established ones) have a habit of delaying debuts. This is especially true of EV startups and basically unavoidable among those that are never going to get off the ground — which seems to be the direction Lordstown is heading.

Despite Schmidt trying to smooth things over with investors, these SEC filings have been incredibly damning. Last week, a filing revealed that the aspiring automaker probably didn’t have sufficient capital to commence production as planned. There were even claims it might not have enough dough to remain operational. But the company specifically merged with DiamondPeak Holdings (a special purpose acquisition company) to get on NASDAQ and goose its IPO.

Thursday’s SEC documents offered more unsettling information. After explaining the importance of marketing strategy in regard to fleet management companies, it noted that it had entered into purchasing agreements that would “establish the terms and conditions of potential future purchases and other cooperation.”

It then explained the general rules they were operating under:

·Term of 3 to 5 years;

·Designation of Lordstown Motors as a preferred supplier;

·Order procedures, including forecasting, confirmation, statusing, and cancellation procedures;

·Down payment terms, which are generally 5 [percent] down 90 days prior to the requested delivery date;

·Invoicing, delivery and payment terms; and

·Other customary terms, including warranties, indemnification, intellectual property use, insurance and confidentiality terms.

These vehicle purchase agreements generally include a projected buyer order schedule over the 3 to 5 year life of the agreement, and may be terminated by either party at will on 30 days’ notice. 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.

To clarify recent remarks by company executives at the Automotive Press Association online media event on June 15, although these vehicle purchase agreements provide us with a significant indicator of demand for the Endurance, these agreements do not represent binding purchase orders or other firm purchase commitments.

That last paragraph is the most important because it’s the one where the company effectively admits to lying. Though I suppose the term “binding” could be used as a semantic defense. But this remains a bad situation since the automaker really doesn’t have anything to show for itself. There apparently aren’t any binding orders, it’s leasing the intellectual property required for the pickup from Workhorse, one of its prototypes recently burned down, and GM has an option to repurchase the facility and all transferred assets of the factory if the company cannot repay the $40 million loan and has to abandon ship.

Meanwhile, Lordstown has invited investors, analysts, and journalists to its factory next week (which had a massive solar array installed outside this year) to tour the grounds and talk about the truck. But the SEC filing stated that the company would be postponing its annual shareholder’s meeting until August 19th — which is a full month behind schedule and likely a bad omen.

[Images: Lordstown Motors]

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  • Wolfwagen Wolfwagen on Jun 21, 2021

    Latest news: Executives sold millions of dollars worth of stock in February before Lordstown earning report. Fecal matter meet air moving device Stick a fork in Lordstown, they are finished (the company and the area)

  • Mustangfast Mustangfast on Jun 21, 2021

    I don’t think much could be less flattering than that grill…also for solar panels, they are typically leased and offset electricity costs, so probably wasn’t a capital expense no matter who installed them

  • MaintenanceCosts We hear endlessly from the usual suspects about the scenarios where EVs don't work as well as gas cars. We never hear the opposite side of the coin. From an EV owner (since 2019) who has a second EV reserved, here are a few points the "I road trip 1000 miles every day" crowd won't tell you about:[list][*]When you have a convenient charging situation, EV fueling is more convenient than a gas car. There is no stopping at gas stations and you start every day with a full tank.[/*][*]Where there are no-idling rules (school pickup/dropoff, lines for ferries or services, city loading, whatever else) you can keep warm or cool to your heart's content in your EV.[/*][*]In the cold, EVs will give you heat from the second you turn them on.[/*][*]EVs don't care one bit if you use them for tons of very short trips. Their mechanicals don't need to boil off condensation. (Just tonight, I used my EV to drive six blocks, because it was 31 degrees and raining, and walking would have been unpleasant.)[/*][*]EVs don't stink and don't make you breathe carcinogens on cold start.[/*][*]EV maintenance is much less frequent and much cheaper, eliminating almost all items having to do with engine, transmission, or brakes in a gas car. In most EVs the maintenance schedule consists of battery coolant changes and tire maintenance.[/*][*]You can accelerate fast in EVs without noisily attracting the attention of the cops and every passerby on the street.[/*][/list]
  • MaintenanceCosts Still can't get a RAV4 Prime for love or money. Availability of normal hybrid RAV4s and Highlanders is only slightly better. At least around here I think Toyota could sell twice the number of vehicles that they are actually bringing in at the moment.
  • Tree Trunk Been in the market for a new Highlander Hybrid, it is sold out with order time of 6 months plus. Probably would have bit the bullet if it was not for the dealers the refuse to take an order but instead want to sell from allotment whether it fits or not and at thousands over MRSP.
  • AKHusky The expense argument is nonsense. My mach e was $42k after tax credit. Basically the same as similarly equipped edge. And it completely ignores that the best selling vehicles are Rams, F150s, and Silverados, all more expensive that a bolt, MAch e or ID4. As an owner, I'd say they are still in second car territory for most places in the country.
  • Johnster I live in a red state and I see quite a few EVs being purchased by conservative, upper-class Republicans (many of them Trump-supporters). I suspect that it is a way for them to flaunt their wealth and that, over time, the preference for EVs will trickle down to less well-off Republicans.