The US car company General Motors sold its stake in the electric car startup Lordstown Motors last quarter.
There is no official statement from GM yet, however, several US media have reported on the sale of the shares, the exact timing of the transaction is not known. GM reportedly owned 7.5 million common shares of Lordstown, with an initial equity value of $75 million. They were issued in exchange for in-kind services and $25 million in cash, CNBC reports. GM’s stake in Lordstown Motors was less than five per cent.
Lordstown Motors, meanwhile, announced as part of its latest financial results announcement that only 500 of its debut model, the Endurance electric pickup – which Foxconn is taking over production of – will be built this year and 2,500 next year. Production of test vehicles is said to have already started. The original plan when the model was unveiled in June 2020 had called for around 20,000 units of the electric pickup to be produced as early as 2021.
The company also increased the starting price for the Endurance to $63,500, before a $7,500 tax credit. Originally, Lordstown Motors had announced that the vehicle would be available from $52,500. “We feel that our value proposition for the Endurance, plus the economics and availability of battery-electric, full-size pickups in the market right now really justifies our price point,” President Edward Hightower told Wall Street analysts in response, according to the Detroit Free Press. “We’re launching the vehicle with a significant amount of standard options.”
In the fourth quarter, Lordstown Motors widened its net loss to $81.2 million. The loss in the same period last year was $38 million. Lordstown reports costs for the past quarter at $115 million. For the full year, the startup reported a loss of $410 million, compared to a loss of $102 million at the end of 2020.
Lordstown Motors began talks to sell the former GM plant to iPhone maker Foxconn for $230 million last autumn. The deal is not yet done, but it will help Lordstown Motors raise the money to launch and grow Endurance sales, Lordstown CEO Dan Ninivaggi now told analysts.
“This is one of the most challenging situations I’ve seen, but I knew it when I was coming in, ” Ninivaggi continued. “I’ve said early on, ‘We’re all in on Foxconn,’ but we need to prove out the benefits of that relationship and it’s got to be a win-win.”
Ninivaggi said Lordstown has enough funds to get through the year and into the next. CFO Adam Kroll said the company has received $200 million from Foxconn, although the sale of the plant is not yet complete. But the startup needs to raise another $250 million “to be profitable in the long term,” Kroll said.