The United States Department of Justice has opened an investigation into electric vehicle manufacturer Workhorse Group. The news adds to the company’s woes, which was, at one time, in competition to win the lucrative contract to build the U.S. Postal Service’s new electric delivery vehicles.
The investigation was revealed by The Wall Street Journal, which reviewed documents related to the case. The focus of the action has not been revealed at this time. Workhorse, however, is also being investigated by the U.S. Securities and Exchange Commission, as revealed by a short seller in September.
That same month, Workhorse said it would suspend deliveries of its flagship vehicle, the C-1000 electric van. At the time, reports Reuters, it said it needed more tests and modifications to ensure the van complied with regulatory standards.
Read Also: Workhorse Group Shares Drop Nearly 50% After Company Misses Out On USPS Contract
The company, once thought to be the frontrunner in the race to supply the USPS with its modernized fleet of delivery vans, lost to Oshkosh Defense, whose bid to produce 165,000 vehicles for $6 billion ended up winning the contract.
That sent Workhorse’s stock value plummeting and led it to ask a judge in the U.S. Court of Federal Claims to issue a preliminary injunction against the USPS to suspend the procurement process while the case was argued.
“The allegations are that basically that [the Postal Service] never planned to seriously consider Workhorse and they put their thumb on the scale to select against Workhorse,” an individual with knowledge of the lawsuit claimed in June.
Workhorse was an early investor in Lordstown Motors, another EV startup that is being investigated by the DoJ. Again, the details of the case are somewhat murky, but the company’s former CEO, Steve Burns, is alleged to have misled investors about pre-orders for its electric truck.