Lordstown Motors, a Struggling EV startup loses GM as investor
- ByStartupStory | March 2, 2022
The Detroit Free Press reports that General Motors sold its stake in Lordstown Motors, an electric vehicle startup that has struggled to get its first vehicle, the electric pickup truck Endurance, to production. GM had an initial equity value of $75 million, wherein 7.5 million shares of common stock was less than 5% of the company. In the fourth quarter of 2021, the automaker sold its stake followed by an undisclosed lock-up period.
For the fourth quarter, a widened loss of $81.2 million or $0.42 per share was disclosed after Lordstown. The startup shared its plan during its earnings calls on monday, to sell and produce up to only 3,000 Endurance trucks through 2023, with an expectation to sell about this year. It needs to raise another $250 million in order to build the 500 trucks, Lordstown told investors on Monday.
In 2018, GM said in relationship with Lordstown that, “It would be closing down its Lordstown factory, which former President Donald Trump took issue with.” Adding further GM sold the plant to another toiling EV company, Workhorse – which still is struggling per its own Q4 earnings that showed a quarterly loss of $1.13 per share. With plans to build electric trucks in the old GM factory, Workhorse’s founder and former CEO, Steve Burns, started Lordstown Motors. GM and Lordstown invested about $75 million in the company and about $240 million into the factory respectively, but wasn’t able to get it off the ground.
Lordstown reveals that its factory was sold in September to iPhone assembler Foxconn for about $230 million, as it didn’t have enough cash to make it by 2023. “The factory deal was not as far along as they expected, another announcement that undoubtedly caused investors to squirm in their seats”, said Lordstown’s leadership on Monday.
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