Investment research firm Hindenberg Research published a report this week accusing Lordstown Motors of misleading investors, causing the start-up automaker’s stock price to fall by more than 18 percent.
In its report, Hindenberg Research said Lordstown Motors is “an electric vehicle SPAC with no revenue and no sellable product, which we believe has misled investors on both its demand and production capabilities.”
More specifically, the report says Lordstown Motors lied about receiving 100,000 pre-orders for its Lordstown Endurance electric pickup truck, which it is marketing toward fleet buyers as an eco-friendly alternative to traditional pickups like the Chevy Silverado and Ford F-Series.
“Our conversations with former employees, business partners and an extensive document review show that the company’s orders are largely fictitious and used as a prop to raise capital and confer legitimacy,” Hindenburg Research claimed, as quoted by Reuters.
Hindenberg Research was the same firm that took aim at electric vehicle startup Nikola last year, accusing the firm of misleading investors and customers with regard to the capability of its electric semi-truck prototype. Nikola eventually acknowledged the accuracy of the report, with company founder and CEO Trevor Milton stepping down from his position shortly thereafter. The report also led GM to back out of a partnership it had entered with Nikola, which would have seen the automaker engineer and produce an electric pickup truck on Nikola’s behalf.
Similar to Nikola, Lordstown Motors also has a loose relationship with GM. Lordstown Motors purchased the Lordstown Assembly plant from GM back in 2019, with the automaker providing the start-up with a $40 million mortgage to secure the deal. Production of the Endurance, which features four in-wheel hub motors and is priced from $52,500 before government incentives, is expected to begin at the Lordstown facility later this year.