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Lordstown Motors CEO on why 2021 is a pivotal year for electric vehicles

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Steve Burns, Lordstown Motors Corp. CEO & founder, joins Yahoo Finance to discuss the delivery expectations of the company’s electric trucks and developments of the new batter plant.

Video Transcript

- Lordstown Motors is aiming to be the first automaker with an electric pickup truck market. Let's check in on the company's progress with Steve Burns who is Lordstown Motor's founder and CEO. Steve, good to speak with you this morning. So we've been following your journey for some time. Give us the latest on where your electric truck stands. When will it start to hit the market?

STEVE BURNS: Good. Production starts in September. We're in what's called beta stage now. We're building the beta vehicles, which are 97% the final product. They have to go through all the crash testing, and all the regulatory and durability. But we're essentially, you know, we have a robotic build. We were-- oh, you're showing there a tug of war with a Ford 150. The unique thing about this vehicle, it's electric, but it also has true four wheel drive. The motors are in the wheels. So it only has four moving parts, and they give very good traction, as you can see here is that we did a little, just a little country pull off there and pulled a Ford across a field.

- That's some cool stuff to see. Steve, how many preorders do you have, and who's ordering these trucks?

STEVE BURNS: Yeah. So we sell at a fleet. So this is a full sized pickup truck. And, as I think most people know, it's a favorite of consumers and of workers. So our initial foray is into fleets, and we have presold 100,000 of these to various fleets across America. So really a big appetite. You've got a fleet that's been using a 17 mile per gallon pickup truck for the last 30 years, and we come out with one that gets equivalent to 75 miles per gallon. And it's just what we had hoped. A lot of pent up demand. A lot of excitement around it. And you do these preorders to kind of get a feel what to tool for in this business, tooling and all the cost associated with the automation required to bring these to market. And so it gives you a good feel of what to tool for and what to build for, and we've been just really happy with 100,000 preorders.

- And Steve I'm just curious about that thought process to explicitly target the commercial market because there's a number of EV players out there. We're going to talk to Lucid Motors in just a little bit here on the program. And it seems a lot of it is focused around the consumer. I'm curious you guys' thought process around focusing commercial first.

STEVE BURNS: Yeah. Commercial has a lot of benefits. They buy in big chunks, very sticky orders, a lot of loyalty, once you're good for them-- good to them. And, you know, consumer can be a little more fickle, right. And so for new OEM with a new kind of vehicle, cutting our teeth on our fleets that are very focused, they know exactly what they want their vehicles to do, they buy your vehicle only if it matches that definition. So, by definition, you get a good fit and a happy customer.

- You know Steve, I want to ask about the plant and getting it ready to make your truck. My in-laws are out in northeast Ohio. I've driven by that plant many times out there on the turnpike. So I know it well, and I'm just curious what that process was getting it to where you needed it to be to start assembling these trucks.

STEVE BURNS: Yeah. For those who don't know, we're called Lordstown Motors because we purchased a GM-- a former GM plant in Lordstown, Ohio. This is a 6 million square foot plant. I think it's the third most productive plant in the United States, and GM used to make Chevy Cruzes here. They exited that business, and we bought the plant fully intact. So we have like 2,000 robots, and stamping, and paint, and assembly, all the things you would associate with an automotive. We are also adding inside of here a giant gigafactory, and our own motor plant as well to make our electric motors. So all the things we need to come to market we're keeping vertically integrated inside this plant, but we're in a part of the world as you talked about that's really well suited for automotive production. And we have a very able-bodied plant. And normally a startup-- you know, we're kind of somewhere between Silicon Valley and Detroit. We're somewhere in between. We're keeping an entrepreneur kind of culture, but we have the assets of a mature automotive company, which you just don't see in a startup. So it's kind of a unique combo.

- Steve, how many workers have you hired, and are they all former GM workers? At least those that work on the floor.

STEVE BURNS: We're up to about 500 employees. To date, most of them have been engineering. We're just starting to layer in as we get the beta builds here the workforce that will actually be on the line making these. And a lot of them will be former GM folks. This plant, you know, and the culture around 100 mile radius of this plant, there's just a lot of generational, three generations of making cars. So a lot of talent around here, and we want to utilize that.

- Talk to us about batteries. There's a lot of-- I'm gonna tell you this, there's a lot of competitors coming in this market testing vehicles close to actually making them. Do you anticipate a battery shortage? And even outside of that, how has the surge in lithium prices impacted what you do?

STEVE BURNS: Good. Of course, if you're an electric vehicle, your battery is your number one thing. That's why we are building our own battery plant here. We don't make the cells, but we assemble these 6,000 small cells into a pack of our own design, and it sits in the floor of the vehicle. So it's a critical part, and you've got to control the cost of it. A lot of people associate, you know there is the raw elements, the lithium like you talked about in the cells. But how you hold those 6,000 cells and thermally manage them, and electrically manage them, and get them to last a long time, that's kind of the secret sauce of an OEM-- electric OEM, anyway. And we do that all in-house here. So we have several cell suppliers A, to make sure we have capacity and B, we're not sole source on anybody. And so we use these 2170 cells that I think Tesla buys those from Panasonic. We buy them from two other vendors that make those. So there's about five players that are the serious automotive cell suppliers, and we have two of those.

- Fair enough. Steve Burns, Lordstown Motors founder and CEO. Good luck this year. Looking forward to seeing your trucks on the road.