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


Lordstown Motors is the place where GM used to operate, and it was opened in Lordstown (Ohio) on October 16, 2020.

Megan Jelinger | AFP | Getty Images

General MotorsAfter an undisclosed lock up period, Lordstown Motors sold its stake during the fourth quarter, Detroit’s automaker confirm Tuesday.

GM had 7.5 million common shares in its stock. LordstownThe deal was part of the SPAC agreement that saw Ohio’s automaker go public in October 2020. Initial equity was $75 million. The shares were offered in return for contributions in kind and cash of $25 million..GM held less than 5% of the stake.

Lordstown announced Monday that it had underwhelming plans for producing and selling up to $1 billion. only 3,000 vehiclesThrough the end of next year, with 500 expected in 2022. These figures are much lower than what the former management paid investors for in the days leading up to the public list. 

Jim Cain (GM spokesperson) declined to give details about the timing of the open-market sales, or how much the net proceeds were. However, he said the sum wasn’t significant.

Although the sale of shares was expected, it was quite unexpected. GM’s participation in the company was a nice gesture. It helped to get Lordstown Assembly back online after the demise of the automaker. ending production there2019

Cain stated that the investment was made to enable them to purchase the plant, and then restart production.

Lordstown has begun pre-production of the first vehicle it produces, the all-electric Pick-up Truck Endurance. They plan to commence customer deliveries during the third quarter of this year.

Lordstown made an announcement in the fourth quarter with Foxconn, the iPhone maker. The plant was to be purchased for $230million. Foxconn (formerly known as Hon Hai Technology GroupHandling the production of Endurance pickup trucks.

Lordstown officials said that the deal was still in process. Both companies have been in discussions to develop future vehicle co-development partnerships. Lordstown CEO Dan Ninivaggi called the agreement a “very good deal.” critical componentfor the future success of the company.