Lordstown Motors gets $20 million jolt from state
LORDSTOWN — The startup auto manufacturer rehabbing the former General Motors assembly plant to produce electric pickup trucks was awarded a state tax credit that will save it an estimated $20 million in payroll taxes.
On Monday, the Ohio Tax Credit Authority approved a 1.63 percent, 15-year job creation tax credit on $91 million in new payroll in exchange for Lordstown Motors Corp.’s promise to create 1,570 full-time jobs.
The company expects to hit the targets by the end of December 2025. It’s now in the process of retooling the massive production facility to produce the Endurance, its battery-powered full-sized pickup, for later in 2021.
The credit is performance-based, and “no actual credits are awarded until commitments are met, as verified,” according to Todd Walker, spokesman for the Ohio Development Services Agency, under which the tax credit authority operates.
Also, the terms of the agreement call for Lordstown Motors to maintain operations at the plant for at least 18 years.
Lordstown Motors purchased the 6.2 million-square-foot facility in November 2019 from GM for $20 million following GM’s decision to close the plant earlier that year. In October, Lordstown Motors completed its merger with New York-based DiamondPeak Holdings Corp. and began trading publicly on the Nasdaq exchange under the ticker RIDE.
That move was expected to inject $675 million into the company to start building the truck.
Under the agreement, Lordstown Motors became a wholly owned subsidiary of DiamondPeak, a special purpose acquisition company, or “blank check” company but kept the Lordstown Motors Corp. name.
The deal includes a $500 million fully committed PIPE — private investment in public equity that is a mechanism that allows institutional investors to invest in private companies — that includes a $75 million investment from GM.
Last month, an update from Lordstown Motors had the company reporting it received about 50,000 nonbinding reservations from commercial fleets for the truck, which has a sticker price of $52,800 before tax incentives.
Deliveries were to start in September 2021with full production ramping up throughout 2022.
The company also reported it expects to increase its staff to 500 by the end of this year. It already has employed more than 250 individuals in manufacturing, engineering, marketing, sales, facilities, human resources, IT, supply chain, accounting and finance, according to November’s company update.