Activist short-seller Hindenburg Research lived up to its name last fall with an explosive report calling out Nikola Motors for alleged deception of investors. Now it's targeting Lordstown Motors, claiming, among other things, that the Ohio startup generated "fictitious orders" for its Endurance electric pickup truck.
It's worth noting up front that Green Car Reports makes no claims about the accusations in the report and hasn't verified them independently.
Lordstown, meanwhile, is preparing an response. "We will be sharing a full and thorough statement in the coming days, and when we do we will absolutely be refuting the Hindenburg Research report,” a spokesperson told Green Car Reports.
The company also said: "Lordstown Motors remains on track for start of production of its Lordstown Endurance all electric pickup truck in September 2021. This week, the company intends to elaborate on its progress towards start of production, including providing an update on beta vehicle production and other important business developments, on its inaugural earnings call."
That first earnings call will likely be a lively one.
Lordstown Motors Corp. was formed by Steve Burns, CEO of electric-truck maker Workhorse, to take over a disused General Motors factory in its namesake Ohio town. In January, the startup said it had 100,000 orders for the Endurance, which is aimed at fleet buyers rather than the retail market, and planned to start production in September.
But these orders are "largely fictitious," the report claims. It said that "raise capital and confer credibility," Burns began paying consultants for every truck pre-order as early as 2016—when he was still CEO of Workhorse.
The Endurance was unveiled last summer, and Lordstown has shown videos of prototypes being driven, along with its bare skateboard chassis. Yet the truck is still far from production-ready the report claims.
Citing an anonymous former employee, the report said Lordstown is making "drastic" design changes. In mid-January, the company “totally switched from a plastic exterior to aluminum,” the source said. That's pushed the Endurance an estimated three to four years away from production, the report claims.
Again citing former employees, the report also said Lordstown hasn't completed the cold-weather, durability, and federally-mandated safety testing required for all new vehicles.
In January 2021, Lordstown’s first street road test resulted in the vehicle bursting into flames 10 minutes into the test drive, the report said, citing copies of a 911 call and police report obtained through Freedom of Information Act (FOIA) requests. Two weeks later, Lordstown announced plans to build "beta" prototypes, the report said.
Lordstown has certainly proceeded confidently for a company that hasn't delivered any vehicles to customers yet. It's already gone public through a "reverse merger" with a special-purpose acquisition corporation (SPAC) shell company, and announced a partnership with Camping World that will spawn an electric RV.