Electric vehicle firm supported by Biden declares insolvency

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【Summary】President Biden's backed electric vehicle company, Proterra, has filed for bankruptcy. The company, which sold over 1,300 electric buses, was valued at $1.6 billion but closed with a market value of $362 million. Energy Secretary Jennifer Granholm, who heavily invested in the company, made a profit of $1.6 million after selling shares. There were also concerns about ethics and calls for divestment. Philadelphia had to take Proterra buses out of service due to defects in their plastic chassis.

FutureCar Staff Aug 14, 2023 7:08 AM PT

Electric vehicle firm supported by Biden declares insolvency

President Biden frequently praised an electric vehicle company before it filed for bankruptcy on Monday. Proterra, a Bay Area-based electric bus and battery maker, cited market and macroeconomic challenges as the reasons for their Chapter 11 filing. The company, which had a valuation of $1.6 billion when Biden took office, closed with a market value of $362 million.

In his $1.9 trillion bipartisan infrastructure plan, President Biden pledged over $10 billion towards zero-emission transit and school bus programs. He has been a vocal supporter of Proterra since assuming office, even virtually touring one of their facilities. During the tour, Energy Secretary Jennifer Granholm, who had significant investments in the company, was also present.

Granholm faced criticism for her financial ties to Proterra. She sold hundreds of thousands of shares in May 2021, making a profit of $1.6 million. This came after her initial pledge to divest from the company. Prior to her Senate confirmation hearing, Granholm served on Proterra's board.

In addition to his support for Proterra, President Biden appointed Proterra's CEO, Gareth Joyce, to the President's Export Council in February 2023. The White House praised Joyce for his leadership in growing Proterra's EV battery manufacturing in the United States and promoting zero-emission solutions for transit and commercial vehicles.

However, Proterra has faced issues with its buses in the past. Philadelphia purchased a fleet of Proterra buses in 2019, but they had to be taken out of service the following year due to defects. Sources familiar with the situation blamed a defect in the buses' plastic chassis that led to cracking.