General Motors sells stake in electric vehicle startup Lordstown Motors

The Lordstown Motors plant is where General Motors once worked, in Lordstown, Ohio, on October 16, 2020.

Megan Gellinger | Agence France-Presse | Getty Images

general motors It sold its stake in Lordstown Motors during the fourth quarter after an undisclosed closing periodAnd the The Detroit automaker confirmed on Tuesday.

General Motors owns 7.5 million shares of common stock in Lordstown As part of the SPAC deal that acquired the Ohio-based automaker in October 2020. The initial stock was valued at $75 million. They were awarded in exchange for contributions in kind and $25 million in cash that GM’s stake was less than 5%.

The revelation comes after Lordstown announced on Monday disappointing plans to produce and sell until 3000 vehicles only Over the next year, including 500 in 2022. Both are significantly less than the amount that the previous administration sold to investors in preparation for the public listing.

GM spokesman Jim Kaine declined to reveal the exact timing of the open market sales or net revenue, saying the total was not material.

The stock sale was somewhat predictable. GM’s involvement in the company was a goodwill gesture to help get the Lordstown assembly plant back up and running after the automaker. End production there in 2019.

“Our goal with the investment was to allow them to complete the purchase of the factory and resume production,” Kabil said.

Lordstown recently began producing pre-production models of its first vehicle, an all-electric pickup truck called the Endurance, at the plant. Planning to start customer delivery during the third quarter of this year.

In the fourth quarter, Lordstown announced a deal with iPhone maker Foxconn to buy the plant for $230 million. The deal includes Foxconn, officially known as Hon Hai Technology GroupHandling production endurance pickup truck.

Lordstown executives said on Monday that the deal was still in the process of finalizing. They are also in negotiations about the two companies’ participation in the development of future vehicles. Dan Ninivaji, Lordstown CEO, described the deal as a crucial element for the company’s future success.

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