GM has sold its small stake in Lordstown Motors
General Motors Co. has sold its small stake in the embattled electric vehicle startup Lordstown Motors Corp., the company confirmed Tuesday.
GM spokesman Jim Cain said the Detroit automaker sold its 7.5 million Class A common stock shares in the company, a less than 5% stake, in the fourth quarter.
Lordstown Motors, under different leadership, purchased the former GM Lordstown Assembly plant in northeast Ohio in 2019 once GM closed the doors there after more than 50 years of production. GM invested $75 million in Lordstown Motors in cash and in-kind contributions.
GM's investment was meant "to facilitate the sale of the plant" to restart production there, Cain said.
Lordstown, though, has yet to start production of its Endurance electric truck. The startup was hit with a series of bad headlines last year after a scathing report from a short seller pushed the CEO and founder, Steve Burns, to exit.
A new CEO is now in place, but on Monday the company's stock declined 20% to $2.53 a share after company leaders reported an underwhelming forecast for truck deliveries that depends on raising more money and finalizing a partnership agreement with the manufacturer Foxconn.
On a conference call with investors, Lordstown executives said they were still working on the agreement with Foxconn, which bought the northeast Ohio plant for $230 million last fall.
Lordstown says it expects commercial production to begin in the third quarter this year with 500 sales slated in 2022. Production will grow to as many as 2,500 trucks in 2023, the company said.
Lordstown Motors is another EV startup that went public through a special asset acquisition company. The short seller whose report triggered Burns' exit, Hindenburg Research, accused the startup of misleading investors with pre-orders that were "largely fictitious and used as a prop to raise capital and confer legitimacy."
Last summer, the company acknowledged receiving two subpoenas from the Securities and Exchange Commission and that prosecutors in New York had begun investigating the company.
The Associated Press contributed.