Can it survive this latest setback?
Two weeks after a report came out stating the US Justice Department opened an investigation into Ohio-based Lordstown Motors, the automaker itself has now acknowledged the federal inquiry. The Securities and Exchange Commission is conducting its own investigation into the troubled EV truck company, along with now-former Chairman and CEO Steve Burns. Burns and CFO Julio Rodriguez suddenly resigned last month.
Late last week, Lordstown confirmed it has "received two subpoenas from the SEC for the production of documents and information, including relating to the Merger between DiamondPeak and Legacy Lordstown and pre-orders of vehicles, and we have been informed by the US Attorney's Office for the Southern District of New York that it is investigating these matters."
The automaker has promised full cooperation with investigators' inquiries. Lordstown's public relations debacle began last May when short-seller Hindenburg Research released a highly detailed report claiming the GM-backed company misled investors and consumers in claiming it had $1.4 billion worth of pre-orders for its truck, the Endurance. Hindenburg's findings have since been verified and Lordstown admitted to overstating that figure.
Also last month, Lordstown said a severe lack of funds may force it out of business within a year or so. Given there was so much at stake, why did Lordstown inflate the pre-order figure? Partly because it wanted to be first to market with an all-electric full-size pickup truck. Not only would the Endurance appeal to regular buyers but also to commercial businesses and other fleet companies.
Unfortunately for Lordstown, the Ford F-150 Lightning beat it to the punch (though Endurance production could begin this fall). Not only does Ford know a thing or two about building vehicles and managing itself in a legal manner, but the F-Series nameplate is one of the most recognized in the US. F-Series trucks have been best-sellers for decades. Armed with affordable pricing, an array of options, and a solid electric powertrain, the F-150 Lightning could turn out to be everything the Endurance is not.
No timetable has been set regarding the publication of investigators' findings, but Lordstown's future remains up in the air.