In February, Proterra, an elective bus company, was on top of the world after its leader received a coveted appointment to Joe Biden’s Export Council.
In a statement, the CEO said, “Accelerating a clean transportation future is an obligation we have to future generations and an opportunity for the United States to be at the forefront of the innovations that will drive the 21st century,” said Proterra CEO Gareth Joyce. “I’m honored to represent the electric vehicle and battery manufacturing industry on the President’s Export Council and look forward to working with the PEC to help advance our country’s global leadership in this critical and emerging sector.”
During a “virtual tour” early in his presidency, President Biden pointed to Proterra and the money Democrats dumped into it, as key to the United States “owning the future.”
Democrats were so committed to the company that Secretary of Energy Jennifer Granholm held hundreds of thousands of shares in the EV company. A few months after the president’s speech, the secretary sold her stake for a cool $1.6 million dollars, citing an ethics agreement.
Talk about fortuitous timing!
The company has now declared bankruptcy.
According to Bloomberg, “the Burlingame, California-based company listed assets and liabilities of at least $500 million each in a Chapter 11 petition in Delaware. The filing gives Proterra protection from creditors while it finds a way to repay them. Shares of the company fell as much as 65% in premarket trading on Tuesday.
Proterra plans to either recapitalize its businesses or sell them off, according to a statement. The firm will continue operating as normal by using existing money to fund its business operations.
“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,” Proterra Chief Executive Officer Gareth Joyce said in the statement.
The firm has business units that make EV batteries and chargers for original equipment manufacturers as well as a division that produces entire buses, according to regulatory filings. Through the end of 2022, most of the company’s revenue came from selling electric buses.”
Bankruptcy being Biden’s plan to “own the future” might be a little too on the nose. Last week the United States saw its credit downgraded following the inflation that has occurred under this administration’s wild spending on companies like Proterra.
The Washington Free Beacon noted, “While Proterra shares tumbled more than 60 percent in after-hours trading Monday, Granholm will not have to worry about losing her investment. Granholm, who served on Proterra’s board of directors, sold the shares for $1.6 million in May 2021, weeks after Biden publicly touted the company. Granholm’s shares would be valued at just $340,000 based on Proterra’s current share price.
Biden’s praise for Proterra—and Granholm’s financial stake in the company—drew comparisons to Solyndra, a solar panel maker that went bankrupt after receiving a $535 million loan guarantee as part of the 2009 Obama-Biden stimulus package. President Obama promoted Solyndra during a tour of its Fremont, Calif., facility in April 2010, saying the company was “leading the way toward a brighter and more prosperous future.” The company shut down in August 2011.
Proterra stood to rake in millions from Biden’s infrastructure and green energy initiatives, the former of which included at least $5 billion in spending on electric buses alone. Biden’s flagship climate bill, the Inflation Reduction Act, also includes spending to help cities convert from diesel buses to electric buses, a major incentive for companies like Proterra.
JoAnn Covington, Proterra’s chief legal officer, acknowledged last year that tax credits and federal grants under Biden’s bills were a major incentive for the company. Grants to purchase electric buses and to create electric vehicle charging infrastructure would ’open up opportunities to accelerate adoption of battery-electric and zero-emissions vehicles to all the other commercial segments on the cusp of being electrified,'” Covington declared.
The Free Beacon had previously reported that the EV company was struggling, despite being propped up by the White House. The newspaper explained, ‘Electric bus company Proterra, which the Biden administration has lauded as ‘pretty amazing,’ saw Philadelphia remove 25 of its buses from the roads in 2020 due to structural problems. Those buses cost the city $24 million. Another Southern California city waited months in 2021 to repair nearly a dozen buses from its electric fleet, more than a third of which were out of service at the time. Ann Arbor Public Schools’ electric buses also use Proterra batteries and drivetrain technology.
Still, those issues did not stop Biden from setting aside $9 billion for electric school buses and local transit vehicles in the Democrat’s November 2021 infrastructure bill. Biden is also not the only prominent Democrat who is spending big on “clean” buses. Michigan Democratic governor Gretchen Whitmer plans to create a $150 million electric school bus program through her 2024 state budget. Even Ann Arbor Public Schools is refusing to step away from electric buses—Lauzzana during his April presentation said the district is committed to purchasing “additional electric buses,” despite its ongoing challenges. For conservative group Michigan Freedom Fund, that commitment is misguided.
‘Michigan Democrats have put the (electric) cart before the horse. The technology and infrastructure for electric buses do not exist at this moment … yet Democrats and school districts insist on purchasing electric buses,’ the group’s communications director, Mary Drabik, told the Washington Free Beacon. ‘This backward approach to policy only creates more costly problems for residents. As long as Democrats continue to spend the tax dollars of hard-working Michiganders, it will be the residents that truly suffer, not the environment.'”
Backward, indeed. But at least the Energy Secretary made a killing while it lasted.