Firm That Exposed Nikola Now Says Lordstown Motors Is A “Mirage”

At this point, we’re wondering where is the FTC with all of this sketchy electric vehicle startup stuff going on? And why is it left to short-sellers to raise red flags over companies like Lordstown Motors? Hindenburg Research short sells companies riding high on the EV startup investment frenzy. If the company’s stock is shorting falls it makes money. It exposed Nikola Motors to questionable claims and brought the startup to its knees. Hindenburg made a fortune on the Nikola tank. 

Now it has set its sights on Lordstown. They’re the ones who bought a closed GM assembly plant in 2019. Lordstown plans on manufacturing all kinds of electric trucks and commercial vehicles. It was in the running to be granted the contract for the next generation US Mail Service mail carriers. It lost the bid.

Hindenburg says Lordstown used a consulting firm to generate pre-orders

Lordstown Motors EV pickup rendering | Lordstown
Lordstown Motors EV pickup rendering | Lordstown

Hindenburg is now saying that Lordstown used a consulting firm, Climb2Glory, to generate pre-orders for its electric pickups. That’s all fine. But because the sales are non-binding the claims of future revenue won’t be able to be converted to real cash flow. Hindenburg says Lordstown is exaggerating demand to increase fundraising. 

In defense, Lordstown says it only hired the firm to determine how many customers there were in the wild for its trucks. “Demand will not be our problem,” CEO Steve Burns told Automotive News. “We will have more demand than we can possibly build.” He also told Bloomberg that “we always stated that pre-orders were non-binding. That is what pre-orders are.”

Hindenburg says in its earning report Lordstown said that a $735 million order from Texas startup E Squared Energy was questionable. That’s because it doesn’t operate a fleet. At least not yet. But Hindenberg also questions E Squared’s ability to place a multimillion-dollar order for anything. Currently, litigation firms are asking for

“Any statement to the contrary is a lie”

Lordstown Motors EV pickup
Lordstown Motors EV pickup | Lordstown

RELATED: Nikola Is Matching Deposits For Its Badger Truck

Burns says, “We are on track for betas this month and the start of production in September (2021). Any statement to the contrary is a lie.” Lordstown says it already has over 100,000 preorders for its EV pickup truck. As of last Friday Lordstown’s stock price was down by 15 %. 

This is following a similar pattern to the one that confronted Nikola back in September. Hindenburg said Nikola was involved in fraud. Its founder Trevor Milton, resigned but continued to dismiss the accusations. Nikola’s stock dropped dramatically after the Hindenberg accusations. Nonetheless, much of what Hindenberg uncovered turned out to be true. 

This resulted in a more or less gutted agreement

Lordstown Motors EV pickup front 3/4 view
Lordstown Motors EV pickup | Lordstown

General Motors and Nikola were finalizing a binding agreement concerning their future EV plans. With Hindenberg’s revelations, GM renegotiated its contract with Nikola. This resulted in a more or less gutted agreement between the two companies. 

As there are so many other EV startups that seem to be in business without products this could be an ongoing story. As Hindenburg finds success shorting EV startups others are surely scrutinizing companies like Fisker, Canoo, and Alpha. They’re surely in Hindenburg’s or another short seller’s crosshairs.