General Motors has sold its stake in struggling electric pickup maker Lordstown Motors, TechCrunch has reported. It reportedly unloaded its 5 percent investment (worth $75 million originally) in the fourth quarter of 2021, as originally disclosed by The Detroit Free Press and confirmed by GM.
Lordstown recently reported a loss of $81.2 million for the fourth quarter, and said in an earnings call earlier this week that it planned to sell only 3,000 of its Endurance electric trucks through 2023 — a far cry from the 32,000 it predicted when it went public via a SPAC deal back in 2020. It aims to build 500 of those this year, but it will need to raise an additional $250 million to do so.
Last year, Lordstown warned that it didn’t have enough cash to produce its electric trucks. Later in 2021, the SEC announced that it was investigating the firm, and then-CEO Steve Burns was subsequently pushed out after he was found to have lied about the number of Endurance pre-orders.
GM got involved with Lordstown Motors after closing its Lordstown, Ohio plan in 2019, and selling it to EV manufacturer Workhorse, founded by Burns. Burns subsequently started Lordstown Motors with the aim building electric pickups at the plant, and obtained $75 million in investment from GM. The idea was to follow the path of Rivian and build electric pickups for businesses, but it’s now in competing in a tougher market against giants like Ford, which recently launched the F-150 Lightning pickup.
Lordstown Motors recently revealed that it didn’t have enough cash to last through to 2023, so it subsequently agreed to sell the Lordstown plant to Foxconn for $230 million and rent space in it. However, Lordstown said that the deal is not as far along as they’d anticipated, a situation that’s compounding the company’s problems.