General Motors no longer invests in Lordstown Motors as the Ohio-based electric vehicle startup continues to struggle to keep its doors open.
GM confirmed on Tuesday that it had sold its stake in Lordstown in the fourth quarter of 2021 after an “undisclosed blockade period”, spokesman Jim Kane told CNBC.
GM owned 7.5 million ordinary shares during the SPAC deal in Lordstown, which made the company public in late 2020. GM’s stake was approximately $ 75 million in initial equity. The shares were given to GM in exchange for $ 25 million in cash and in-kind contributions. The shares account for less than 5 percent of GM’s ownership in Lordstown.
Lordstown has been experiencing significant difficulties since last year, delaying the launch of its first pickup and revealing to investors that it has no cash. Last year, he told shareholders there were “substantial doubts” that the company would open in June 2022. Foxconn, a Taiwanese-based electronics maker, bought Lordstown’s Ohio plant, providing a joint venture between the two companies that ultimately The bill will provide for the production of the all-electric Endurance pickup. The partnership is still being finalized, although the plant is already owned by Foxconn. CEO Dan Ninivagi said the partnership is key to Lordstown’s future endeavors.
Lordstown Motors slows down the Endurance truck, sells the Ohio plant to Foxconn
The uncertainty was enough for GM to get out. Kane declined to disclose the exact timing of GM’s sale of Lordstown shares, nor could he commit to net income or market value of the shares, as the total was not a significant figure. GM’s investment was seen as a “gesture of goodwill” as Lordstown struggled to keep cash flow from investors. GM and LG have built a $ 2.3 billion joint-stock battery plant in Lordstown, but it was not known whether the plant would supply cells for the Endurance pickup.
It seems that GM’s plan has always been to give up its investment in Lordstown. “Our goal in investing was to allow them to complete the purchase of the plant and restart production,” Kane said.
Yesterday, during a conversation about Lordstown’s profit for the fourth quarter of 2021, company executives confirmed that there are several pre-production vehicles already in production. These cars are used for various validation activities to achieve full homologation, said President Edward Hightower. “Despite ongoing challenges in parts supply and other supply chain issues, we continue to focus on commercial production and sales in the third quarter of 2022.” GM sales. Shares of Lordstown rose more than 3.5% at the time of writing, trading at $ 2.66 per share.
Disclosure: Joey Klender is not a shareholder in Lordstown.
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