Lordstown Motors is facing an inquiry from the U.S. Securities and Exchange Commission (SEC) over accusations made by a short seller that the startup all-electric automaker misled investors.
According to a new report from Reuters, Lordstown Motors announced that it received a request for information from the SEC on Wednesday regarding a report from Hindenburg Research that claimed the startup automaker had lied about receiving 100,000 pre-orders for the upcoming all-electric Lordstown Endurance pickup truck.
“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 claims.
“We are cooperating with that inquiry,” said Lordstown Motors CEO Steve Burns in reference to the SEC inquiry during an earnings conference call. Burns added that the Lordstown Motors board of directors had formed a special committee to investigate the matter.
Hindenburg Research, which has taken a short position in Lordstown Motors, is the same firm that accused EV startup Nikola of misleading investors with regard to the capabilities of Nikola’s all-electric semi-truck prototype. Nikola was eventually forced to acknowledge the report, with company founder and CEO Trevor Milton stepping down shortly thereafter. Additionally, the Hindenburg Research report also led General Motors to back out of a partnership with Nikola.
Lordstown Motors purchased the GM Lordstown Assembly plant from General Motors in 2019, with GM providing Lordstown Motors with a $40 million mortgage to finalize the deal. Lordstown Motors is expected to ramp up production of its new Endurance all-electric pickup later this year.
Pricing for the new Endurance pickup is set at $52,500 before government incentives. Additionally, Lordstown Motors plans to reveal a second vehicle, an all-electric van, this summer, with production ramping up next year.