General Motors confirmed on Tuesday that it had sold its stake in Lordstown Motors during the fourth quarter. The Detroit automaker reportedly sold its stake in the electric startup after its undisclosed lock-up period had expired.
GM acquired a stake in the electric company after it finalized a SPAC deal that took it public in October 2020. The automaker reportedly owned around 7.5 million common shares in Lordstown, which was given in exchange for contributions and $25 million in cash.
During its stock market debut, GM's less than 5% stake in electric carmaker was estimated to be worth around $75 million. GM did not disclose the exact timing of when it had sold its stake in Lordstown or the exact amount it had gotten from the sale.
GM's disclosure comes as Lordstown is facing increasing pressure from investors due to its recent production plans announcement. The company said Monday that it only plans to produce and sell up to 500 vehicles this year and up to 3,000 vehicles through next year. The figure was significantly lower than what the company had promised to investors in the run-up to its stock market debut.
The stock sale was a foregone conclusion, given that GM had made it clear in the past that its participation in Lordstown's IPO was a goodwill gesture. During that time, GM was helping Lordstown set up its factory and get it up and running. GM halted production in its Lordstown factory in 2019.
GM spokesperson Jim Cain said the company goal in investing in Lordstown was to help it finish the acquisition of its name-sake factory and for it to resume operations as soon as possible.
The Lordstown facility just recently began building preproduction models of the company's first all-electric pickup truck, the Endurance. Lordstown said it plans to start delivering vehicles to customers within the third quarter of this year.
Lordstown also recently signed an agreement with Apple iPhone supplier Foxconn to buy its factory for $230 million in the fourth quarter. Foxconn, officially known as Hon Hai Technology Group, will manufacture electronic components for the Endurance as part of the deal.
Lordstown executives stated Monday that the agreement is still being finalized. The company said it is also looking into inking other deals with Foxconn and other companies to accelerate the development of its future vehicle models. The deal with Foxconn, according to Lordstown CEO Dan Ninivaggi, is "essential" to the company's future growth.
