Lordstown Motors CEO: 'I Don't Think Anybody Thought We Had Actual Orders'
Lordstown Motors Corp (NASDAQ: RIDE) CEO Steve Burns was on CNBC Thursday morning to address recent short-seller allegations of fraud.
What Happened: Commenting on Hindenburg Research's report against Lordstown, CNBC's Phil Lebeau told the electric automaker CEO Steve Burns he came on the network in the past and made references to "serious orders", or reservations.
Burns said the company has always made it clear it has collected "non-binding letters of intents" but referred to them as "pre-orders in the real world." As such, the company "always classified them for that" and the company has "a lot of those pre-orders."
"We have pre-orders directly from fleets, we have pre-orders from people that sell to fleets," the CEO said Thursday.
Gauging demand is very important for a company like Lordstown that starts to manufacture a new vehicle every six minutes, Burns said. As such, management needs to know one-year in advance how many vehicles will be required to address future demand.
"We never said we had orders. We don't have a product yet so by definition you can't have orders," @LordstownMotors CEO Steve Burns tells @lebeaucarnews. "I don't think anybody thought we had actual orders. That's just not the nature of this business."$RIDE pic.twitter.com/64G9gvBsQS
— Squawk Box (@SquawkCNBC) March 18, 2021
Why It's Important: Burns on Wednesday told investors during a post-earnings call the company is cooperating with an information request from the SEC related to accusations of misleading claims by Hindenburg.
Pre-orders are "by definition non-binding" with no deposit required and can be canceled, the CEO told CNBC. Such is the "nature of EV startups."
"We don't have a product yet, by definition we can't have orders," he said.
What's Next: The pre-order data did "exactly what it was supposed to do" and give the company insight into what was previously "completely unknown science."
"I don't think anybody thought we had actual orders," he said. "That's just not the nature of this business."
During Wednesday's call, Burns said the company is cooperating with the SEC inquiry and "the board of directors has formed a special committee to review these matters."
Lordstown's stock was down 9.2% to $13.69 at publication time.
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