SEC Alleges Lordstown Motors Misled Investors on Endurance EV Pickup Sales
The U.S. Securities and Exchange Commission (SEC) has charged bankrupt electric vehicle startup Lordstown Motors with making false claims about demand for its Endurance electric pickup truck. The company has agreed to pay $25.5 million to settle the charges, with funds directed toward resolving pending class action lawsuits.
Key Allegations Against Lordstown Motors
- Inflated Preorder Numbers: The SEC claims Lordstown misrepresented non-binding letters of intent as firm preorders
- False Parts Availability Claims: Company allegedly misled investors about access to critical GM-supplied components
- Unrealistic Production Timeline: Maintained false September 2021 launch date despite internal knowledge of delays
“In the race to deliver the first mass-produced electric pickup, Lordstown exaggerated true demand for the Endurance,” stated Mark Cave, SEC Associate Enforcement Director. “Such misrepresentations distort capital markets and prevent informed investment decisions.”
The Preorder Controversy
According to SEC filings, Lordstown’s sales team—comprised largely of automotive industry novices—solicited non-binding purchase commitments from fleet customers beginning in early 2020. The company then publicly portrayed these as firm preorders:
- By January 2021, founder Steve Burns claimed “unprecedented” 100,000 preorders
- Internal investigation later revealed 40-71% were misleading
- Many commitments came from entities lacking resources for large purchases
The truth emerged after Hindenburg Research’s April 2021 report questioning order legitimacy. A subsequent internal probe confirmed most preorders lacked substance.
Parts Supply Misrepresentations
Lordstown told investors it had access to General Motors parts through a factory purchase agreement, claiming this provided production advantages. However, the SEC found:
- Only 4 of 90 requested parts received GM authorization
- GM warned Lordstown in December 2020 about supply chain burdens
- Company still promoted “open parts bin” narrative in regulatory filings
The parts issues ultimately added $150 million in unexpected costs to the Endurance program.
Current Status and Responses
Lordstown Motors filed for Chapter 11 bankruptcy in 2023. Founder Steve Burns, who recently acquired most Endurance assets for a new venture called LandX, disputes the SEC’s characterization:
“I categorically reject any suggestion of wrongdoing,” Burns stated. “The facts and truth are supposed to matter in our system.”
The SEC investigation remains ongoing, though Burns himself faces no individual charges in the current settlement.
This story has been updated with Steve Burns’ response.
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