Electric Bus Maker Proterra Files For Bankruptcy
Another electric automaker that arrived on the public markets by merging with a special purpose acquisition company (SPAC) has bitten…
Another electric automaker that arrived on the public markets by merging with a special purpose acquisition company (SPAC) has bitten the dust. Proterra Inc (NASDAQ: PTRA), a California-based electric bus company, has filed for Chapter 11 bankruptcy.
Proterra designs and manufactures electric transit buses and battery systems for other heavy-duty auto manufacturers. The company debuted on the public markets in June 2021 by merging with ArcLight Clean Transition Corp at a $1.6bn valuation. It has filed for bankruptcy in a Delaware court barely two years after, joining other electric vehicle SPACs like Lordstown Motors and Electric Last Mile.
Many other electric vehicle SPACs are treading water, with market values far below their initial merger valuations. They include Faraday Future (down 88%), Canoo (down 88%), and Lion Electric (down 74%).
- Proterra is a leading supplier of electric buses to transit systems across America, a fast-growing business as regulations and government subsidies encourage transit providers to electrify their fleets. The company booked $309mn in revenue in 2022, up 27% from the previous year, but with a $238mn net loss. It ended 2022 with $1.6bn in order backlogs.
Proterra said it intends to continue operating normally as it undergoes bankruptcy proceedings. The company said it is taking action to separate business units “to maximize their independent potential.” In addition to selling its buses, Proterra sells electric battery systems for cargo vans, semi-trucks, and construction equipment built by other companies.
“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,” CEO Gareth Joyce said.
Proterra has a solid underlying business, leaving ample opportunity for investors and creditors to salvage assets from the company’s bankruptcy process. The company’s problem lies in hefty losses tied to its expensive manufacturing operations. Building electric vehicles at scale is tough; doing that at a profit is even more challenging.
Proterra’s story is different from other bankrupt carmakers that sell consumer sedans, trucks, and SUVs; these markets proved hard to crack because of intense competition, and the likes of Lordstown and Electric Last Mile barely built or sold any vehicles. They both sold less than 100 trucks before filing for bankruptcy. Electric Last Mile was later bought out of bankruptcy by Mullen Automotive, a fellow struggling electric vehicle startup.
In contrast, Proterra has sold over 1,300 buses and booked hundreds of millions in revenue; a typical Proterra bus costs about $750,000.
- Proterra’s bankruptcy filing listed both assets and liabilities between $500mn and $1bn.