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HomeAutomobileGM sells its stake in embattled EV start-up Lordstown Motors

GM sells its stake in embattled EV start-up Lordstown Motors

The Lordstown Motors manufacturing facility is the place GM as soon as operated, in Lordstown, Ohio, on October 16, 2020.

Megan Jelinger | AFP | Getty Photographs

General Motors offered its stake in Lordstown Motors in the course of the fourth quarter following an undisclosed lock-up interval, the Detroit automaker confirmed Tuesday.

GM owned 7.5 million shares of widespread inventory in Lordstown as a part of a SPAC deal that took the Ohio-based automaker public in October 2020. The shares had an preliminary fairness worth of $75 million. They got in change for in-kind contributions and $25 million in money GM’s stake was lower than 5%.

The disclosure comes after Lordstown on Monday introduced underwhelming plans to supply and promote as much as only 3,000 vehicles by means of subsequent 12 months, together with 500 in 2022. Each are far beneath the quantity former administration offered traders on within the runup to the general public itemizing. 

GM spokesperson Jim Cain declined to reveal precise timing of the open market gross sales or the online proceeds, saying the overall wasn’t materials.

The share sale was considerably anticipated. GM’s involvement within the firm was a goodwill gesture to help in getting the Lordstown Meeting plant again up and operating following the automaker ending production there in 2019.

“Our goal in investing was to permit them to finish the acquisition of the plant and restart manufacturing,” Cain mentioned.

Lordstown not too long ago began producing preproduction fashions of its first automobile, an all-electric pickup truck referred to as the Endurance, on the plant. It plans to start buyer deliveries during the third quarter of this year.

Within the fourth quarter, Lordstown introduced a take care of iPhone maker Foxconn to buy the plant for $230 million. The deal contains Foxconn, which is formally referred to as Hon Hai Technology Group, dealing with manufacturing of the Endurance pickup truck.

The deal remains to be being finalized, Lordstown executives mentioned Monday. They’re additionally in negotiations for the 2 firms to co-develop autos sooner or later. Lordstown CEO Dan Ninivaggi characterised the deal as a critical component to the corporate’s future success.

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