The Securities and Trade Fee has requested Lordstown Motors for extra details about allegations that the EV startup misled traders about its progress to this point. Lordstown Motors stated Wednesday that it’s cooperating with the inquiry and that its board of administrators has created a particular committee to overview the claims. The startup is backed by Normal Motors, which has a seat on the board.
The allegations got here final Friday from short-selling firm Hindenburg Research, which disclosed together with the report that it had taken a brief place in Lordstown Motors. The agency beforehand launched a report about hydrogen trucking startup Nikola that equally led to probes from the SEC and the Division of Justice. (Normal Motors was additionally planning to take a stake in Nikola before that report.)
Hindenburg claimed within the report that among the EV startup’s greatest preorders had been made by corporations that don’t seem to have the cash required to buy huge batches of Lordstown Motors’ electrical pickup truck, which begins at round $50,000. Hindenburg additionally claimed that Lordstown Motors misled the general public, traders, and the federal government concerning the progress it’s made to date on the prototypes of its Endurance electrical pickup truck, and pointed to a current hearth as proof.
“We need to take a second and acknowledge that we’re conscious of the short-seller’s report,” CEO Steve Burns stated on an earnings name Wednesday, earlier than disclosing the SEC inquiry and the interior overview. “That’s all we will say, and we can’t touch upon this in the course of the Q&A interval following this name, or any follow-up questions and conversations, till the particular committee has completed its overview.”
Lordstown Motors went public in late 2020 as a part of a merger with a particular goal acquisition firm, or SPAC, and raised $675 million in money. Wednesday’s earnings name was the startup’s first with traders as a public firm. Simply earlier than it, the corporate reported that it misplaced $101 million in 2020 however completed the yr with $630 million in money.
Burns beforehand stated the Hindenburg report was stuffed with half-truths and lies, in line with The Wall Street Journal. “There’s at all times haters,” he stated on Monday, in line with native outlet WKBN. “I quoted Taylor Swift to any person the opposite day: ‘Haters gonna hate, hate, hate, hate, hate. You gotta shake it off.”
The SEC’s inquiry and the interior overview aren’t slowing down Lordstown Motors, no less than not but. The startup stated Wednesday that it’s accelerating growth of a second car: an electrical van. Burns additionally stated Lordstown Motors stays dedicated to delivery the primary Endurance electrical pickup vehicles this coming September at the Lordstown, Ohio facility that the startup bought from General Motors in 2019 — a deal that was praised by the Trump administration.
Lordstown Motors is just concentrating on industrial fleet gross sales within the close to time period for the Endurance, however the startup is nonetheless racing to convey the electrical pickup to market in order that it may be the primary one produced at scale. The startup is in comparison with a few of its friends as a result of it principally received began with a manufacturing unit in place.
Burns stated Wednesday that he believes the Endurance might be a beautiful possibility for state and native governments, particularly following President Biden’s push to affect the federal fleet. He additionally stated the army is , although he didn’t share any particulars.
“All people feels demand isn’t going to be our drawback,” Burns stated. “There isn’t a firm on planet Earth six months away from coming into into mass manufacturing — not hand constructing — mass manufacturing of a full-size electrical pickup truck.”