The White House-backed green agenda got dealt a major blow this week as another electric vehicle company filed for Chapter 11 bankruptcy.
Any company that files for bankruptcy under the Chapter 11 code can stay in business while restructuring its business obligations, including any debts and assets.
BIDEN CELEBRATES ONE-YEAR CHIPS ANNIVERSARY BY VOWING TO CONTINUE SECURING SUPPLY CHAIN
As the White House continues to push for more electric vehicles by 2030, here are three electric vehicle companies that are struggling financially.
Proterra
Proterra, which has been praised by President Joe Biden on several occasions, filed for Chapter 11 bankruptcy Monday night when it valued its assets and liabilities between $500 million and $1 billion. This value is down from $1.6 billion since January 2021.
This is bad news for Biden’s green energy plan, considering he previously lauded Proterra as the future of the electric vehicle industry in 2021. The president claimed Proterra was “getting us in the game” and predicted electric vehicle companies would “end up owning the future.”
Proterra issued a statement from CEO Gareth Joyce on Monday night after filing the bankruptcy motion with a federal court in Delaware.
“While our best-in-class EV and battery technologies have set an industry standard, we have faced various market and macroeconomic headwinds that have impacted our ability to efficiently scale all of our opportunities simultaneously,” Joyce said. “As commercial vehicles accelerate towards electrification, we look forward to sharpening our focus as a leading EV battery technology supplier for the benefit of our many stakeholders.”
Lordstown Motors
The previous major automaker to declare itself bankrupt was Lordstown Motors, an electric vehicle manufacturer that was praised by then-President Donald Trump. The electric truck manufacturer filed for Chapter 11 bankruptcy protection in June after Taiwan’s Foxconn didn’t invest in the company despite agreeing to do so, according to Reuters. As a result, Lordstown's shares fell a substantial 35%.
Lordstown sued Foxconn over fraudulent conduct and misleading promises that included a $170 million agreement with the electric vehicle manufacturer, according to a complaint filed with a Delaware bankruptcy court.
“Once it secured ownership of the plant and obtained a workforce to go with it, Foxconn refused to honor its obligations ... while at the same time causing [Lordstown] to devote substantial resources to the same cause,” the lawsuit read.
Nikola Corporation
Although it hasn’t filed for bankruptcy yet, Nikola Corporation paused assembly production and cut costs after it lost $240 million in the first fiscal 2023 quarter, Reuters reported in May. The company’s restructuring decision sent its stock shares down 13% at the time.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
"This level of cash burn is not sustainable for our business, and we are looking at every option for reductions in spending," said Stasy Pasterick, finance chief of Nikola, adding the company seeks to raise more capital through cost reductions, payables, and cash collections.
Despite touting Proterra and other electric vehicle manufacturers in the past, the Biden administration has not yet publicly commented on the latest bankruptcy.