Lordstown in the dock; SEC's latest, and Earth Day arm-twisting on Wall Street

Welcome to Callaway Climate Insights. A volatile week ahead for electric vehicle stocks.

One pumped-up electric vehicle stock is a scandal. Two is a trend. That’s the reality investors — including, again, General Motors (GM) — face this week after short-seller Hindenburg Research accused high-profile electric truck maker Lordstown Motors (RIDE) of fraud in promoting pre-orders for its Endurance pickup.

Lordstown shares, already down more than half for the past month in the market’s sell-off of environmental stocks, promptly plunged Friday and were up a bit Monday after the company denied the charges and said it would release a full report on Wednesday with it quarterly earnings.

Following the scandal around Nikola Corp. (NKLA) last year, which Hindenburg also exposed for publishing a fake video of its promised electric vehicles, this is unwelcome news for EV investors. Both the iShares Self-Driving EV and Tech ETF (IDRV) and the Global X Autonomous and Electric Vehicles ETF (DRIV) were little changed Monday as investors awaited the next step. Comments by Lordstown CEO Steve Burns in The Wall Street Journal that the 100,000 pre-orders the company had noted for the Endurance before were not actually firm commitments, didn’t help its case.

In addition to casting a pall over the EV sector, the Lordstown story highlights concerns about SPACs, or special purpose acquisition companies, as it was one of the three big ones last year tied to electric vehicles. Shares of the second one, Nikola, have never recovered from the drubbing they took by Hindenburg last summer. The third one, Fisker (FSR), has been holding its own in the past few days, though is still off its February highs.

And in the middle of it all again sits General Motors, which is trying its hardest to be part of the electric vehicle revolution but so far has not found the right dance partner. For investors, it’s another painful lesson that while the promise of electric vehicles is very real, not all the promises of electric vehicle makers should be bought.

More insights below. . . .

Don’t forget to contact me directly if you have suggestions or ideas at dcallaway@callawayclimateinsights.com.

Monday’s insights: Kerry twisting arms on Wall Street, and the latest from the SEC’s Allison Herren Lee

. . . . The Biden Administration’s five-alarm fire treatment of the climate emergency is causing some consternation on Wall Street, where arms are being twisted to do more ahead of the president’s climate summit next month. John Kerry wants a major, short-term commitment from the biggest banks to trot out on the global stage. Read what it might look like here. . . .

. . . . SEC Acting Chair Allison Herren Lee has done more on climate change for investors in her two months at the helm than her predecessor did in three years. In her latest speech on Monday, she unveils where the regulator will go next and why. Read more here. . . .

. . . . Every time inflation scares run through financial markets, the prospect of another commodities “super-cycle” get tossed around. This time it’s with battery metals, such as lithium, copper or nickel, which have been on fire lately. With mining investors and now companies getting on board, could it be real this time? Read more here. . . .

Read all of Monday's insights

News briefs: Indonesia boosts EV tax perks, Cormann new OECD chief

Editor’s picks:

  • Indonesia lures with tax perks for EVs, seeks to expand beyond nickel

  • Mathias Cormann elected OECD chief

  • U.K. considers ban on new North Sea oil exploration

Read all of Monday's news briefs

Data driven: Food systems feed emissions

. . . . Roughly a third of the world’s greenhouse gas emissions come from food systems, data analysis shows. Food system related emissions come from a variety of different sources, but primarily from agriculture-related land use and land changing activities, like deforestation (71.1%). See which country is the top emitter and which consumed more than 28% of the world’s meat in 2020. Read the full data point here.