GM has sold its stake in embattled EV startup Lordstown Motors as the Ohio-based company seeks additional funding to put its Endurance pickup into production.
GM received 7.5 million shares of Class A common stock in Lordstown Motors in exchange for selling its Lordstown Assembly plant to the company at a discounted rate back in 2018. Speaking to The Detroit Free Press this week, GM spokesman Dan Flores confirmed the automaker sold its stake in Lordstown Motors in the fourth quarter of last year, which was equivalent to less than five percent of the company.
“We were a small investor in the company,” Cain told the newspaper. “The goal was to help facilitate the sale of the plant and the restart of production.”
An analyst that spoke to The Detroit Free Press said GM had sold the assembly plant to Lordstown in order to appease the demands of former U.S. President Donald Trump for the automaker to keep the plant open. Lordstown also agreed to sell GM all of the regulatory carbon credits it received as a result of selling the battery-electric Endurance for the first three years of production at a 75 percent discount – an arrangement that never reached fruition amid constant production delays for the electric pickup truck.
Lordstown Motors has become ensnared in controversy since GM first became involved in 2018. A short-seller report published in early 2021 accused the company of misleading investors with regard to real-world demand for the Endurance pickup, as well as its production capabilities. The report led to the resignation of co-founder and CEO Steve Burns, who has since been replaced by former Icahn Enterprises CEO Daniel Ninivaggi.
Lordstown Motors is currently in discussions with Foxconn to sell the spawling former GM assembly plant to the Taiwan-based iPhone manufacturer. In its Q4 financial earnings report, which was published earlier this week, the company said it had already received $150 million in equity and down payments from Foxconn as part of the $230 million deal. Lordstown will eventually lease space within the assembly plant from Foxconn to produce the Endurance pickup.
Lordstown Motors reported losses of $410 million in 2021 and said this week that “raising additional capital in the near term is critical to the successful launch of the Endurance,” and the execution of its operating plan.