Electric vehicle start-up Lordstown Motors has allegedly defrauded investors and covered up technological shortcomings, according to a new report from controversial short-selling firm Hindenburg Research.
The report specifically alleges Lordstown’s often-referenced backlog of 100,000 pre-orders is almost entirely fake: “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.”
It is further claimed the brand’s upcoming Endurance ute – slated to come onto the market in September 2021 – has been plagued with a range of unreported faults during development. According to the report, the prototype caught fire during testing and was destroyed in January this year.
Lordstown stock fell approximately 21 per cent – from US$17.78 (AU$22.94) to US$13.99 (AU$18.05) – almost immediately following the release. However, the price rebounded 14 per cent – back to US$16.22 (AU$20.92) – in the days since.
Speaking to the The Wall Street Journal earlier this week, the Lordstown Motors CEO Steve Burns said the accusations were based on "half-truths and lies." He said a comprehensive response would be released by the end of this week.
CarAdvice has contacted representatives for the Lordstown brand for further comment on the controversy. This story will be updated when more information becomes available.
Last year the Hindenburg Research company – which makes money by shorting stock and then tanking the price through its widely-publicised investigations – almost single-handedly brought down the GM-affiliated Nikola brand.