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General Motors Sells Its Stake in EV Startup Lordstown Motors, Perspectives Are Bleak

Despite a recent cash influx from Foxconn, the Ohio-based EV startup Lordstown Motors is struggling to remain afloat. We now learn that General Motors has sold the stake it had in Lordstown Motors.
General Motors sold its stake in EV startup Lordstown Motors 10 photos
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It’s a rough time for EV startups, and many of them struggle to keep their doors open in the face of increased competition, supply chain problems, and inflation. Short on cash and hit by a flurry of problems, Lordstown Motors was just about to close the doors when they announced an emergency solution to sell their Ohio plant to Foxconn. Although the move meant that the startup could continue to develop the Endurance electric pickup, it is also a blow to its future plans.

It turns out investors are also fed up with the company’s blunders. General Motors decided to sell its stake in Lordstown Motors, which amounted to 7.5 million shares of common stock. A spokesperson for GM declined to say when the shares were sold or the market value at the time of the sale, saying the total was not a material figure. GM’s investment was considered more like a “goodwill gesture” to keep the struggling Lordstown afloat as it had cash flow difficulties.

Our objective in investing was to allow them to complete the purchase of the plant and restart production,” a GM spokesperson said for CNBC.

Although Lordstown Motors did complete the plant's purchase eventually, ongoing problems forced them to sell it to Foxconn in February. The deal is not yet finalized, but the Taiwanese company is already running the plant. The American EV startup thinks the money they got from this partnership will allow them to complete the work and start commercial production of their first model, the Endurance pickup truck.

The perspectives are bleak though, as confirmed in Lordstown’s Q4 2021 Earnings Call. Although the company has assembled several pre-production vehicles, production forecasts are disappointing. The company plans to produce and sell only 3,000 vehicles through next year, including 500 in 2022. These figures are far below those presented by former management to investors when the company went public.

 
 
 
 
 

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