Lordstown Motors Corp. (LMC), a new original equipment manufacturer (OEM), has acquired the GM manufacturing complex in Lordstown, Ohio. The move paves the way for LMC to begin production of the Endurance all-electric pickup truck, purpose-built for fleets starting in late 2020.
The LMC entity was created in connection with, and for the purpose of, acquiring the GM facility to manufacture electric trucks in Lordstown.
The Lordstown executive team is led by founder and former CEO of Workhorse Group, Steve Burns, as well as other key former members of the Workhorse C-Suite. Joining Lordstown will also be experienced automotive leaders from Tesla, GM, VW, Karma Automotive, and Formula One.
<We are committed to the people of Lordstown, we will locate our headquarters in the Lordstown plant, and we plan to build the Endurance pickup truck utilizing experienced workers who helped produce millions of vehicles in this very same plant.—Steve Burns, LMC CEO
The 6.2-million-square-foot Lordstown factory is a fully-equipped automotive plant that has produced more than 16 million vehicles to date.
The quality and precision of the production robotics and equipment in the Lordstown facility is evident. Our team feels this is a factor to help us hit the ground running in building the Endurance pickup truck.—Rich Schmidt, Chief Production Officer, Lordstown Motors, and former Director of Manufacturing, Tesla, Inc.
Lordstown Motors is entering into an intellectual property licensing agreement (IPLA) with Workhorse. Under the terms of the IPLA, Workhorse is granting LMC a three-year exclusive license of certain intellectual property relating to its W-15 electric pickup truck in exchange for an initial equity stake of 10% in LMC, which will be anti-dilutive for two years.
Going forward, Workhorse is entitled to a license fee equal to 1% of the gross sales price of each LMC truck sold, up to the first 200,000 units. LMC has agreed to pre-pay a portion of the license fee in an amount equal to 1% of the aggregate debt and equity commitments LMC intends to raise.
Once the pre-payment has been amortized over actual production, LMC will pay on a per unit shipped basis up to the 200,000 unit cap. Workhorse will receive an additional 4% commission on the gross sales price of trucks sold which fulfill the 6,000 pre-orders for the W-15 transferred from the Company to LMC.
This long-term partnership allows Workhorse to benefit by both monetizing our existing technology and participating in the upside potential of this new venture without prohibitively diluting our existing shareholders. Having an affiliated company with significant automotive production capacity also provides us with beneficial manufacturing footprint options in the future, should Workhorse win substantially larger contracts as we scale our operations. We also appreciate GM’s acceptance of our combined proposal and believe it represents the best opportunity to keep production in Lordstown. We look forward to working together in the future as we finalize this transaction and explore additional production possibilities at the plant.Workhorse CEO Duane Hughes
The Endurance pickup truck utilizes a 4-wheel-drive hub-motor system, a design that reduces the number of moving parts. Fleet managers benefit with less breakdowns, lower maintenance, and most importantly, less cost. The overall benefit is an attractive Total Cost of Ownership (TCO), which translates into a significantly lower lifetime operational cost compared to traditional pickup trucks.
The Endurance pickup truck is designed with features fleets want, such as an onboard power export, allowing fleet workers to run power tools at the job site without the need for a portable generator or leaving the truck running.
The truck is engineered to be lightweight, with all-wheel drive and a low center of gravity, while maintaining ground clearance.
Lordstown Motors has set a goal to make the Endurance pickup truck the safest, most economical, and greenest electric pickup truck ever built.