The U.S. Department of Justice is investigating electric start-up Lordstown Motors, The Wall Street Journal has revealed.
It is reported that the U.S. attorney’s office in Manhattan is handling the investigation and in a statement, Lordstown said it is cooperating.
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“Lordstown Motors is committed to cooperating with any regulatory or governmental investigations and inquiries,” a company spokesperson said. “We look forward to closing this chapter so that our new leadership – and entire dedicated team – can focus solely on producing the first and best full-size all-electric pickup truck, the Lordstown Endurance.”
While details about the investigation aren’t known, it could be related to claims from founder and ex-chief executive Steve Burns that the company had received 100,000 pre-orders for the truck even though they were non-binding. Lordstown’s shares fell by as much as 17 per cent on the back of this latest report.
Lordstown has been in a world of trouble since a short seller report published in mid-March asserted that the brand’s orders were “almost entirely fake.” This triggered a Securities and Exchange Commission (SEC) investigation into the start-up which continues. Things then get worse for Lordstown as it halved its production goals for 2021 and admitted it needed more capital.
A couple of weeks later, it claimed that it did not have enough money to fund commercial scale production but mere days after Burns’ resignation in June, Lordstown changed its tune and claimed that it will indeed start building the Endurance in late September and has enough money to last until 2022.
