A 2017 lawsuit shows how electric car startup Lordstown paid outside workers to gin up 10,000 pre-orders per year

Vice President Mike Pence at the Unveiling of the Lordstown Endurance_June 25, 2020
Vice President Mike Pence at the unveiling of the Lordstown Endurance.

  • A 2017 lawsuit shows how Lordstown Motors banked some pre-orders for its upcoming pickup truck.
  • The case reveals the company paid outside workers to generate up to 10,000 pre-orders per year.
  • Experts warn pre-orders and reservations are flawed measures of a startup’s potential.
  • See more stories on Insider’s business page.

Electric vehicle startup Lordstown Motors has been paying salespeople to secure pre-orders of its battery-powered truck prototype for at least five years – a practice that is outside the bounds of most startups without a sellable product – a little-noticed lawsuit from 2017 reveals.

In the suit, a former employee accused Workhorse Group, which Lordstown spun out of in 2019, of failing to pay him commissions he earned by logging over 8,000 pre-orders for the Endurance pickup truck now being offered by Lordstown. A recent report by Hindenburg Research noted the suit, but Insider is the first outlet to report its details and its implications both for Lordstown and the host of startups racing to meet growing demand for EVs.

Commissioning pre-orders is not illegal, but it should raise a major red flag for investors, said Gartner analyst Michael Ramsey.

While Lordstown’s practice appears unique in the EV startup world, experts warn that no matter how they’re collected, pre-orders and reservations aren’t great tools for predicting which young automakers will prosper. Because they’re typically non-binding, they don’t necessarily indicate what level of demand a vehicle will generate when it enters production. A startup’s success is better determined by its technology and talent than by a metric that hinges more on interest than intent.

Lordstown’s pre-order list ‘obviously does not indicate real demand’

Even with the electric vehicle market starting to grow, deep-pocketed investors are crucial to any startup. It takes billions of dollars to launch an automaker. The industry’s history is littered with failures, and most of today’s startups will likely flounder before their products hit the market, according to risk consulting firm Guidehouse.

To attract capital, many fledgling automakers use pre-order figures as a proxy for the demand their future vehicles will command. Tesla in particular has a long history of doing this. The problem is that these orders represent a consumer’s interest in actually buying the vehicle once it reaches the market – not their commitment to do so.

The fact that Lordstown paid commissions for bringing in these orders further undermines the figures’ credibility, Ramsey said. “It obviously does not indicate real demand,” he told Insider.

Lordstown Motors has been commissioning pre-orders for years

The idea for Lordstown Motors originated at Workhorse Group. In 2019, Workhorse CEO Steve Burns left the startup. He bought the patent for its electric pickup, along with thousands of pre-orders for it, and made it the basis for a new company, Lordstown.

Workhorse Truck
Workhorse Truck

Today, Lordstown boasts more than 100,000 pre-orders for the pickup. That’s impressive when compared to those for similar EV startups like Lucid Motors and Fisker, which have about 8,000 and 14,000 pre-orders, respectively.

In March, short-selling firm Hindenburg Research became the first to report on the questionability of Lordstown’s pre-orders, calling them “largely fictitious” and an attempt to “mislead” investors. The company’s stock fell 16% the day after the report was released and continued to slide.

At the time, Burns responded that the company has been transparent with the status of its orders. He also reiterated Lordstown’s plans to release the electric pickup truck in September.

Pre-orders were heavily incentivized

The 2017 lawsuit was filed against Workhorse by its former director of fleet sales, Jeffrey Esfeld. When he was hired in 2016, Esfeld said, he was tasked with securing up to 10,000 pre-orders per year. In just over a year, he logged more than 8,000 pre-orders, according to the court document. That number alone would account for over 8% of Lordstown’s current pre-orders to date. A Lordstown spokesperson would not confirm whether signatures gathered by Workhorse Group in 2016 are part of that total. (Esfeld declined a request for comment from Insider.)

Esfeld received a commission of roughly $30 per vehicle for each signed pre-order, according to the suit, on top of his $100,000 base salary. He would also receive a commission of 0.14% of the vehicle’s sale price for pre-orders that officially became sales. He was one of several employees that worked specifically on obtaining pre-orders for the truck.

During his time at the company, Esfeld was paid commissions for 3,050 vehicle pre-orders, from companies including Duke Energy and American Electric Power. (The case also notes Esfeld had been working to win over Amazon, which ultimately agreed to buy 100,000 electric delivery vans from Lordstown rival Rivian.) But, he alleged, after laying him off in 2017, Workhorse failed to pay him $440,707 he had earned in commissions, representing about 5,000 pre-orders, including from Ryder, one of Lordstown’s biggest pre-order signees to date. (He ultimately won the suit, and Workhorse paid him an agreed upon amount of $87,000 in damages and $32,245.02 in attorneys’ fees and costs.)

Steve Burns Workhorse
Steve Burns at Workhorse Group

The practice continued at Lordstown. In 2020, the startup hired consulting group Climb2Glory to commission orders, according to Hindenburg Research. On a page that was deleted after the short-seller’s report was released, Climb2Glory referenced how it helped Lordstown generate pre-orders.

Workhorse Group, Lordstown Motors, and Climb2Glory did not respond to requests for comment from Insider.

A questionable spin on a questionable practice

The Workhorse and Lordstown policy of paying commissions for pre-orders appears rare. “This is the first time I’ve heard of a start-up in that space doing anything like that,” Pitchbook analyst Asad Hussain told Insider. Comparable electric car startups, including Rivian, Lucid Motors, Fisker, and Nikola, do not pay commissions for pre-orders or contract workers to secure them, Insider found.

In recent automotive history, Elon Musk set the standard of using pre-orders to preview sales figures. “Tesla’s reservations taught the industry that this is a way to develop credibility with investors,” Ramsey said. But while it once charged $50,000 to pre-order a Roadster, it now asks a mere $100 from someone who wants a Cybertruck. That’s comparable to (usually refundable) reservation fees charged by the likes of Fisker ($250) and Lucid Motors ($300).

That lesson isn’t necessarily a good one, Ramsey said. “Investors need to think long and hard about the viability of the pre-orders that any of these startups are touting.”

Hussain told Insider that investors need to focus more on technology and execution, rather than “propaganda.” He thinks the Wall Street trend of using special-purpose acquisition companies to go public has put a lot of companies, like Lordstown Motors, in a position they’re not mature enough for yet.

Endurance electric pickup truck by Lordstown Motors
Steve Burns with Lordstown’s Endurance.

“The ability for early stage startups to go to market, even without revenue, creates a double-edged sword,” Hussain told Insider. “It allows everyday people to gain access to disruptive technologies like electric cars, but it also puts new companies and investors in a precarious position – how can they prove there will be demand for their product, without revenue? That’s where pre-orders can get tricky.”

For Lordstown, reliance on pre-orders has put it in the crosshairs of notorious short-seller Hindenburg Research. Just last fall, the same group released a damning report on Nikola that caused the company’s stock to plummet and its CEO Trevor Milton to step down. Currently, Lordstown is under investigation by the Securities and Exchange Commission for its pre-order practices. Its stock is trading at around $9, down from a high of $30 in February.

“A lot of these companies tout non-binding pre-orders or reservations,” Hussain said. “But, if you’re actually paying for them [the pre-orders] it does bring up some questions and it is not characteristic of the space.”

“The key question mark for many of these startups is: Can you actually get your factories up and running? Can you actually manufacture those vehicles?”

Mark Matousek contributed reporting.

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Fisker and Lordstown Motors slide as Goldman Sachs downgrades the stocks on electric-vehicle industry competition

Fisker Ocean
The Fisker Ocean.

  • Fisker and Lordstown Motors fell Thursday after Goldman Sachs cut its stock ratings for both companies.
  • The firm lowered Fisker to a sell rating from neutral, and Lordstown was reduced to neutral from buy.
  • Goldman expects General Motors, Ford, Apple and others to escalate competition in the electric-vehicle industry.
  • See more stories on Insider’s business page.

Shares of Fisker and Lordstown Motors dropped Thursday after Goldman Sachs downgraded the ratings of both electric-vehicle makers. The firm cited increasing competition and concerns about product timing.

Fisker was cut to sell from a neutral rating, and its 12-month price target was lowered to $10 from $15. Lordstown was cut to a neutral rating from buy, and while its target was cut to $10 from $21.

Fisker dropped as much as 12%, while Lordstown lost 5% at intraday lows.

Goldman said the downgrades come as multiple companies including General Motors, Ford and Volkswagen plan to accelerate their transition toward EVs as they seek to completely exist the internal combustion engine market.

Meanwhile, the firm noted that several big tech companies such as Apple, Xiaomi and Baidu are considering a larger role in the auto market with a branded product, or through a collaboration with an original-equipment manufacturer.

“Established EV OEMs such as Tesla are also scaling quickly,” said Goldman Sachs equity research analysts led by Mark Delaney. “Several of these companies are committing billions of R&D dollars to both powertrain technology and software.”

For Fisker specifically, Goldman said while it appreciates the steps it’s taking to try to differentiate its upcoming products “we are incrementally concerned about what we believe is the company’s late time to market … as competition increases.” Fisker is preparing to enter the EV industry in the fourth quarter of 2022 with its Ocean SUV.

The bank pointed out that Fisker has announced a plan for a “unique follow-on vehicle” with Apple supplier Foxconn that could enter the market around the fourth quarter of 2023. However, “by the time this vehicle may be ramping, the competitive landscape could be even more challenging (including the potential for new big tech entrants via partnerships).”

On Lordstown, Goldman said it’s “now more cautious on the ramp for the Endurance truck,” after the vehicle ran out of battery after about 40 miles during an off-road race in Baja California, last week. That “suggests to us that there could be more development work to do on the powertrain than we had expected,” said Goldman.

“This factor, coupled with the global auto supply chain challenges that are making it difficult to obtain parts, could increase the probability that the company’s market entry will be delayed and/or could occur at a more measured pace than we had expected,” said the bank, adding that Lordstown is aiming to start vehicle production in September.

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EV startup Lordstown Motors says it’s cooperating with an SEC probe after a short-seller alleged it misled investors

Endurance electric pickup truck by Lordstown Motors
Lordstown said it won’t share any additional information until it completes an internal review of the claims.

  • Lordstown Motors is cooperating with an SEC inquiry following accusations from a short-seller that the company misled investors.
  • The company created a committee to review the claims, CEO Steve Burns said Wednesday.
  • For 2020, Lordstown reported a $101 million net loss, sending shares down 3% in late trading.
  • See more stories on Insider’s business page.

Lordstown Motors said Wednesday that it is cooperating with financial regulators following a short-seller’s report that accused the electric-vehicle startup of misleading investors by overstating its order volume.

The Ohio-based upstart is complying with an information request from the US Securities and Exchange Commission, Lordstown’s founder and CEO Steve Burns said at the start of the company’s inaugural earnings call Wednesday.

Lordstown’s board of directors has also appointed an internal committee to review the short-seller’s claims, Burns said, adding that the company would not be able to share any more information until the group completes its audit.

Hindenburg Research, the same short-seller that leveled accusations of fraud against electric-truck firm Nikola in September, announced on Friday that it had taken a short position in Lordstown. Hindenburg’s claims that sparked an SEC investigation into Nikola eventually led its outspoken founder to resign and helped unravel a deal with General Motors.

Hindenburg said Lordstown has “no revenue and no sellable product” and accused it of misleading investors “on both its demand and production capabilities.” Lordstown was founded in 2018 and plans to manufacture a $52,500 electric pickup truck for fleet customers, the Endurance, at a former General Motors plant.

Read more: The 6 biggest things we learned about Nikola founder Trevor Milton from talking to dozens of his friends and colleagues

Although Lordstown claims to have 100,000 preorders for the pickup, Hindenburg said the company has artificially juiced those figures to boost its investor appeal. Hindenburg alleges that many preorder holders – including one company that reserved 14,000 units – never intended to follow through on a purchase, and that Lordstown paid consultants to drum up reservations.

“Our conversations with former employees, business partners, and an extensive document review show that the company’s orders are largely fictitious and used as a prop to raise capital and confer legitimacy,” the short-seller said.

A Lordstown spokesperson on Friday told Insider in an email that the startup “will absolutely be refuting” Hindenburg’s report in a future statement.

Hindenburg also alleged that Lordstown is years away from producing the Endurance, citing one former employee.

Lordstown reiterated on Wednesday that it is on track to begin producing the pickup in September, and said that interest in the model has been greater than expected. The company said it will produce several prototypes by the end of March, and that it is accelerating plans to build it’s second vehicle, a van.

Lordstown went public through a blank-check merger in October in a deal that valued the firm at $1.6 billion. It now has a market cap of roughly $2.5 billion.

On Wednesday, the company reported a net loss of $101 million for 2020. Shares fell about 3.3% in late trading following the release.

Read the original article on Business Insider

The short-seller that uncovered fraud at Nikola is accusing another upstart EV maker of misleading investors

Unveiling of the Lordstown Endurance_June 25, 2020_2
Hindenburg alleges that Lordstown’s orders are “largely fictitious.”

  • Hindenburg Research, which published a report on fraud at Nikola, has taken aim at Lordstown Motors.
  • The short-seller accused the EV startup of misleading investors, sending shares plummeting 20%.
  • Lordstown did not immediately respond to Insider’s request for comment.
  • See more stories on Insider’s business page.

Hindenburg Research, the short-seller that accused Nikola of “intricate fraud” and unraveled its deal with General Motors, is taking aim at another electric-vehicle startup.

The firm said Friday it is taking a short position in Lordstown Motors, accusing the company of pumping up preorder numbers to generate investor interest in a lengthy report. Like many EV startups, Lordstown went public through a special-purpose acquisition company in October.

Shares of Lordstown were down nearly 17% as of Friday afternoon.

“Lordstown is an electric vehicle SPAC with no revenue and no sellable product, which we believe has misled investors on both its demand and production capabilities,” Hindenburg said in its report titled “The Lordstown Motors Mirage.”

Lordstown did not immediately return Insider’s request for comment.

Read more: Nikola founder Trevor Milton convinced the world he was the next Elon Musk. Insiders say a history of lies brought the billionaire down.

Lordstown was founded in 2018 and plans to produce a commercial pickup truck for fleet use, the Endurance, at a shuttered GM plant in Lordstown, Ohio. One of Hindenburg’s key accusations is that, although Lordstown has said it has 100,000 preorders, few of those customers actually plan on buying a truck.

“Our conversations with former employees, business partners, and an extensive document review show that the company’s orders are largely fictitious and used as a prop to raise capital and confer legitimacy,” the short-seller said.

Hindenburg detailed conversations with multiple Lordstown preorder holders who said they don’t intend to follow through. One business owner who signed up for a 1,000-truck order said they won’t actually order any vehicles and described the preorder as a marketing relationship, according to Hindenburg.

Lordstown CEO Steve Burns pushed back against the claims in a statement to Bloomberg, saying “we always stated that pre-orders were non-binding. That is what pre-orders are.”

The short-seller also alleges that Lordstown is much further away from production than it says. It cites a former employee who estimates that production will start in three to four years, rather than by September, as Lordstown says.

Former employees also told Hindenburg that Lordstown “has completed none of its needed testing or validation, including cold weather testing, durability testing, and Federal Motor Vehicle Safety Standards testing required by the NHTSA.”

In September 2020, Hindenburg published a report accusing Nikola and its founder, Trevor Milton, of fraud. In the aftermath of the accusations, Milton departed the company and a major deal with GM fell through.

Nikola denied most of the allegations but said in February that it had determined that Milton made several inaccurate statements following an internal investigation.

Read the original article on Business Insider

Lordstown Motors plunges 23% after short-seller report says the EV SPAC has ‘no revenue and no sellable product’

Endurance electric pickup truck by Lordstown Motors
The Endurance.

  • Shares of Lordstown Motors fell as much as 23% on Friday after Hindenburg Research revealed it has a short position in the electric-vehicle maker.
  • The research firm said Lordstown has misled investors and has “no revenue and no sellable product.”
  • Shares are down roughly 25% since Lordstown Motors’ public debut via SPAC in October.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Shares of Lordstown Motors tumbled as much as 23% on Friday after short-seller Hindenburg Research said the electric pickup truck maker has misled investors.

The research firm said it had taken a short position in the Lordstown Motors after determining that it has “no revenue and no sellable product.”

Lordstown’s stock plunged to as low as $13.64 per share on Friday. The company went public via a SPAC in October amid a rush of other EV SPACs including Nikola, Hyliion, Canoo, and Fisker.

Hindenburg slammed Lordstown for misleading investors on both its demand and production capabilities. Lordstown said in January it had received more than more than 100,000 non-binding production reservations from commercial fleets for its EV truck.

“The company has consistently pointed to its book of 100,000 pre-orders as proof of deep demand for its proposed EV truck,” Hindenburg said. “Our conversations with former employees, business partners and an extensive document review show that the company’s orders are largely fictitious and used as a prop to raise capital and confer legitimacy.”

Lordstown Motors is down roughly 25% since its public debut in October.

Screen Shot 2021 03 12 at 10.31.08 AM
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Auto startup Canoo just entered the electric pickup race – here are the coolest features in trucks from Tesla, Rivian, and more

Canoo pickup truck
Canoo says its truck will hit the market in 2023, but preorders will open this year.

  • Electric pickup trucks are set to flood the car market over the next couple of years.
  • Startups and legacy carmakers promise to pack their trucks with innovative features.
  • For example, Bollinger’s B2 will have removable doors, and the GMC Hummer EV will drive diagonally.
  • Visit Business Insider’s homepage for more stories.

Electric-vehicle startup Canoo on Wednesday unveiled an upcoming pickup loaded with fold-out work surfaces, a customizable back seat, and an extendable bed. But it’s not the only carmaker planning an electric truck with unique features.

Established makes like Ford, General Motors, and Tesla – along with upstarts like Rivian and Bollinger – are all racing to introduce battery-powered options to the hugely popular vehicle segment, and they’re trying their best to one-up each other in the process.

From what we know so far, many of these forthcoming EV trucks share some key qualities. With exceptions, they generally claim to pack tons of horsepower, supercar-like acceleration, and a great deal of utility into a sleek, futuristic package.

Read more: REVEALED: How much Tesla, Rivian, and Nikola pay their employees, from engineers to managers

Plus, several companies are looking to set themselves apart from the pack by cramming their trucks with useful and just-plain-cool features – everything from a removable roof to in-truck storage for a slide-out camp kitchen.

Check out some of the wildest features promised in the Rivian R1T, Tesla Cybertruck, Bollinger B2, GMC Hummer EV, Canoo pickup, and Lordstown Endurance below.

Although they’re not on the market just yet, multiple electric pickup trucks are set to take the world by storm over the next couple of years.

Canoo pickup truck
Canoo pickup truck

Electric pickups on the way include the Rivian R1T, Bollinger B1, GMC Hummer EV, Lordstown Endurance, and, of course, the controversially styled Tesla Cybertruck.

The Cybertruck, Tesla's first electric pickup truck, is seen in this undated handout picture released by the company. Tesla/Handout via REUTERS.
The Cybertruck, Tesla’s first electric pickup truck, is seen in this undated handout picture released by the company

We don’t have all the details yet about these trucks, but here are some of the coolest features that will apparently be available.

Rivian R1T
Rivian R1T.

Canoo’s pickup will have a work surface that folds out from its frunk…

Canoo pickup truck
Canoo pickup truck

And tables that fold down from its sides as well.

Canoo truck 1
Canoo pickup truck.

It’ll also have a built-in bed extender that lengthens it from six to eight feet.

Canoo pickup truck
Canoo pickup truck.

Canoo also included a hidden step that makes it easier to access the bed. It’s also a drawer where owners can stash food, drinks, and valuables when out and about.

Canoo pickup truck
Canoo pickup truck.

Rivian’s R1T will feature what the company calls a “gear tunnel,” essentially a long cargo compartment running widthwise through the middle of the truck, behind the rear seats.

Rivian R1T gear tunnel
Rivian R1T.

That tunnel can potentially be customized for lots of different purposes such as a slide-out camp kitchen, which is a $5,000 add-on.

Rivian R1T Camp Kitchen
Rivian R1T.

According to patent filings, the R1T also may have a “swing and drop” tailgate that can fold out to 90 degrees like a standard tailgate, or drop all the way down to 180 degrees for easier access to the bed.

Rivian R1t
Rivian R1T.

Source: Motor Authority

Not to mention, the R1T can spin in place like a tank.

Rivian R1T
Rivian R1T.

Not sure exactly what that tank-turn feature means? 

Fun. That’s what it means. 

The GMC Hummer EV, unveiled in October, promises optional features like an “extract mode” that lifts the vehicle by six inches on demand …

2022 GMC HUMMER EV 038
2022 GMC Hummer EV.

… and a four-wheel-steering system that cuts down its turning radius and lets it drive diagonally.

2022 GMC HUMMER EV 044
2022 GMC Hummer EV.

The Hummer EV also sports a transparent roof made of removable panels.

2022 GMC HUMMER EV 065
2022 GMC Hummer EV.

To help with challenging off-road terrain, customers will be able to opt for underbody cameras …

2022 GMC HUMMER EV 039
2022 GMC Hummer EV.

… as well as underbody armoring to protect the battery and other vulnerable spots.

2022 GMC HUMMER EV 040
2022 GMC Hummer EV.

Tesla’s Cybertruck failed to live up to the hype within minutes of its debut due to its supposedly unbreakable windows, but the model has no shortage of features that’ll be quite exciting – should they come to be.

FILE PHOTO: Nov 21, 2019;  Hawthorne, CA, U.S.A; Tesla CEO Elon Musk unveils the Cybertruck at the TeslaDesign Studio in Hawthorne, Calif. The cracked window glass occurred during a demonstration on the strength of the glass.  Mandatory Credit: Robert Hanashiro-USA TODAY
News: Tesla Cybertruck

During the Cybertruck’s reveal event, Tesla CEO Elon Musk showed off a retractable ramp for loading dirt bikes, ATVs, and other cargo into the bed.

Tesla cybertruck ATV

Tesla also claims the retro-futuristic truck will be impervious to dents, scratches, and bullets thanks to a thick, stainless-steel body.

Cybertruck 1
Tesla Cybertruck.

It’ll also purportedly have a transparent roof that can be optioned with solar cells. Musk said on Twitter that the solar-roof option could generate 15-plus miles of charge per day.

Cybertruck 3
Tesla Cybertruck.

Source: Elon Musk on Twitter

Built for utility, the boxy Bollinger B2 doesn’t have much in the way of modern conveniences. It sports manual windows, manual mirrors, analog gauges, and no screens, but it still has a few tricks up its sleeve.

Bollinger Motors B2 driving outdoors
Bollinger B2.

It boasts removable windows, doors, and roof panels.

8 Bollinger Motors B1 glass roof top outdoors
Bollinger B2.

Plus, it will supposedly have a nifty, folding rear-cabin wall, which will make room for bulkier items that won’t fit in the bed.

21 Bollinger Motors B2 side outdoors
Bollinger B2.

Without a pesky engine in the way, the B2 will offer a full-length pass through, which lets owners haul 16-foot-long boards and other cargo.

bollinger pass through
Bollinger.

The Lordstown Endurance, meanwhile, claims to have a drivetrain with only four moving parts.

Endurance electric pickup truck by Lordstown Motors
The Endurance.

That’s because it has a hub motor in each wheel.

Lordstown Endurance   Sneak Peek 3
The Endurance.

But while the EV pickups are on the way, they won’t be here right away. Lordstown Endurance, Hummer EV, and R1T deliveries are expected to begin in 2021, while an electric Ford F-150 won’t be around until mid 2022.

Endurance electric pickup truck by Lordstown Motors
The Endurance.

Source: Road & Track

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US EV companies rally after Biden announces electric fleet plans for the federal government

Joe Biden
President Joe Biden waves after being sworn in during his inauguration on the West Front of the U.S. Capitol on January 20, 2021 in Washington, DC.

  • Shares of American EV manufacturers are roaring higher on Tuesday after President Biden announced the federal fleet is going electric.
  • Shares of Workhorse Group, Nikola, and Lordstown Motors all jumped double digits after the news broke.
  • The US federal fleet is made up of 645,000 vehicles which cost taxpayers some $387 million in fuel costs in 2019.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

US-based EV companies are rallying on Tuesday after President Biden announced the entire federal vehicle fleet will go electric with American-made products.

“The federal government also owns an enormous fleet of vehicles, which we’re going to replace with clean electric vehicles made right here in America, by American workers,” said Biden on Tuesday.

President Biden continued, “this would be the largest mobilization of public investment and procurement, infrastructure and R&D since World War 2.”

Shares of Workhorse Group, Nikola, and Lordstown Motors have all responded, jumping double digits after the announcement.

Read more: MORGAN STANLEY: Buy these 9 sports-betting stocks ahead of the industry’s expected legalization in 12 states this year and its growth to $10 billion in 2025

The US federal fleet comprises 645,000 vehicles, including 245,000 civilian vehicles, 173,000 military vehicles, and 225,000 post office vehicles.

Additionally, according to the Federal Fleet Report, the federal government spent over $386 million on fuel costs to run the fleet in 2019 alone.

The move by the Biden administrations continues the EV boom markets have witnessed over the past few years.

The Global X Autonomous & Electric Vehicles ETF saw 83% returns over the past year, while big names like Tesla have done even better, returning 193% to shareholders during the same period.

Now American EV manufacturers are seeing a spike in share prices after Biden’s announcement. Workhorse Group, Nikola, and Lordstown Motors saw their shares spike as much as 30%, 15%, and 19%, respectively.

Workhorse group may have benefitted more than its peers because the company was already in talks with the USPS to provide delivery vans, but the process stalled. Now investors are hoping the contract will be picked up again, and shares are responding.

Shares of Workhorse traded at $31.62 as of 11:50 am EST, giving the company a $2.98 billion market cap.

While shares of Nikola traded at $23.77 and shares of Lordstown Motors traded at $26.99. 

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