GM Has Option To Purchase Emissions Credits From Lordstown Motors
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General Motors and Lordstown motors have entered an agreement that will allow the American automaker to purchase emissions credits from the company at a discounted price.
In August of last year, Lordstown Motors entered an agreement with GM that would allow the Detroit-based automaker to purchase emissions credits from it at a purchase price equal to 75 percent of their fair market value. This would allow GM to profit off the sale of these credits, as it could then turn around and sell the credits to another automaker at full market value.
This agreement was first discovered by Verge journalist Sean O’Kane, who dug up details from the Form 10K that Lordstown Motors filed with the U.S. Securities and Exchange Commission last year.
Interesting: GM has the option to buy all of @LordstownMotors’ emissions credits for the first three full years of production at 75% market value. A little ZEV credit arbitrage in exchange for backing the startup. $RIDE pic.twitter.com/2bzXaranc2
— Sean O’Kane (@sokane1) March 25, 2021
The agreement indicates that Lordstown Motors expects its first three production model years to be 2022, 2023 and 2024, however the agreement could extend beyond these model years if Lordstown Motors experiences any setbacks in its production schedule.
Automakers that make electric vehicles only can sell emissions credits issued to them to another manufacturer in order to help that company comply with federal emissions regulations. In 2020, Tesla generated more than $1.58 billion in emissions credit sales – helping the electric vehicle start-up post its first annual net profit in the company’s history.
Fiat Chrysler Automobiles (now Stellantis) was the industry’s biggest spending on regulatory credits last year. The company spent $362 million on emissions credits in Europe in 2020, the vast majority of which were purchased from Tesla.
While this agreement with Lordstown Motors could eventually result in a decent payout for GM, it hinges entirely on Lordstown Motors actually producing vehicles. Lordstown Motors is currently facing an inquiry from the U.S. Securities and Exchange Commission (SEC) over accusations made by a short-seller that the startup lied about receiving 100,000 pre-orders for its Endurance electric pickup truck. The company also has requested a loan from the U.S. Department of Energy and sought additional backing from outside investors to gather funds to produce the Endurance.
As of right now, the Lordstown Endurance is still expected to enter production for the 2022 model year at the former GM Lordstown Assembly plant in Ohio.
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Um… the truck is still vapor ware.
Pollution credits are a SCAM! Tesla will implode as soon as Trump pulls the plug in 24!!
who is trump?
Melania’s husband? Or something like that. ⬆️
hahaha!!! that is the J in DJT.
Trump is that guy going to prison for keeping two sets of books. Oh, and his company isn’t making money anymore on account of some big tie he told
Perhaps he can share a cell with Hunter.
Hunter and HILLARY
Isn’t it going to be hard for GM to purchase Credits when Lordstown doesn’t and most likely will not have any actual vehicles HAHA
When will the BEV credit ponzi scheme run out?
Ponzi scheme within a Ponzi scheme.
Explain to me what the 100% markup and its profits go on a new truck or car?Also where most of the problems we are having with imported electronics?
Hilarious no nothings parroting Hindenburg lies in the comments. Vaporware huh? Get a clue.