White House faces challenges in selecting successful electric vehicle firms.
The White House-backed green agenda suffers setback as another electric vehicle company files for bankruptcy
The White House-backed green agenda received a major blow this week as yet another electric vehicle company filed for Chapter 11 bankruptcy. This means that the company can continue its operations while restructuring its business obligations, including debts and assets.
Struggling Electric Vehicle Companies
As the White House continues to push for more electric vehicles by 2030, here are three electric vehicle companies that are currently facing financial difficulties:
- Proterra
- Lordstown Motors
- Nikola Corporation
Proterra, a company that has been praised by President Joe Biden on multiple occasions, filed for Chapter 11 bankruptcy on Monday night. The company’s assets and liabilities are currently valued between $500 million and $1 billion, a significant decrease from its value of $1.6 billion in January 2021.
This news is particularly concerning for Biden’s green energy plan, as he previously hailed Proterra as the future of the electric vehicle industry in 2021. The president expressed his belief that Proterra would lead the way and predicted that electric vehicle companies would dominate the future.
Proterra’s CEO, Gareth Joyce, issued a statement after filing for bankruptcy, acknowledging the challenges the company has faced in scaling its opportunities due to market and macroeconomic headwinds. However, he expressed optimism about Proterra’s role as a leading EV battery technology supplier.
Lordstown Motors, an electric vehicle manufacturer previously praised by former President Donald Trump, also filed for Chapter 11 bankruptcy protection in June. The company’s shares plummeted by 35% after Taiwan’s Foxconn failed to invest in the company as agreed.
Lordstown Motors subsequently sued Foxconn, accusing them of fraudulent conduct and misleading promises. The lawsuit claimed that Foxconn refused to honor its obligations while causing Lordstown to allocate significant resources to the partnership.
Although Nikola Corporation has not filed for bankruptcy yet, the company paused assembly production and implemented cost-cutting measures after incurring a $240 million loss in the first fiscal quarter of 2023. This decision resulted in a 13% drop in the company’s stock shares.
Nikola’s finance chief, Stasy Pasterick, acknowledged the unsustainable level of cash burn and stated that the company is exploring various options for reducing spending and raising capital.
Despite previously praising Proterra and other electric vehicle manufacturers, the Biden administration has not yet publicly commented on the latest bankruptcy.
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