The Lordstown Motors plant is where GM once operated in Lordstown, Ohio on October 16, 2020.
Megan Gelinger | AFP | Getty Images
General Motors sold its stake in Lordstown Motors in the fourth quarter after an undisclosed lockdown period., The Detroit automaker confirmed on Tuesday.
GM held 7.5 million shares of common stock in Lordstown as part of the SPAC deal that took the Ohio automaker public in October 2020. The initial value of the shares was $75 million. They were given in exchange for contributions in kind and $25 million in cash.. The share of GM was less than 5%.
The disclosure comes after Lordstown on Monday announced disappointing plans to build and sell up to 3,000 vehicles over the next year, including 500 in 2022. Both numbers are well below the amount the previous management sold to investors ahead of the public listing.
GM spokesman Jim Cain declined to disclose the exact timing of open market sales or net revenue, saying the total was immaterial.
The sale of shares was somewhat expected. GM’s involvement with the company was a gesture of goodwill to help rebuild the Lordstown assembly plant and keep it up and running after the automaker stopped production there in 2019.
“Our goal with the investment was to enable them to complete the purchase of the plant and resume production,” said Kane.
Lordstown recently began producing pre-production models of its first vehicle, an all-electric pickup truck called the Endurance, at the plant. The company plans to begin deliveries to customers in the third quarter of this year.
In the fourth quarter, Lordstown announced a deal with iPhone maker Foxconn to buy the factory for $230 million. The deal includes Foxconn, officially known as Hon Hai Technology Group, which builds the Endurance pickup truck.
The deal is still in the process of completion, Lordstown executives said on Monday. They are also in talks to jointly develop vehicles between the two companies in the future. Lordstown CEO Dan Ninivaji described the deal as critical to the company’s future success.