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It only took 25 months from listing to bankruptcy.

Author | Cao Tingting

A star car company in the United States is going bankrupt.

Proterra, an electric car maker, was forced to file for bankruptcy protection in a federal court in Delaware just 25 months after it went public.

As an electric bus manufacturer, Proterra was once regarded as the "Tesla of the bus world". At its peak, Biden visited its factory, with capital injections from giants such as BMW and Daimler.

After filing for bankruptcy, the earnings call, originally scheduled for August 9, was also suspended.

As soon as the news came out, Proterra shares fell into a plummeting mode, with a market capitalization of $26.23 million and a share price of just $0.10 as of press time, with a market capitalization as high as $4 billion.

It took only two years to fall from the peak to the bottom.

In addition to Proterra, recently, many American tram companies have also encountered difficulties. For example, Nicholas, the "Tesla of the car industry", has just announced that he will recall all pure electric trucks and stop selling them. For Nikolai, who is already cash-strapped, this is almost a disaster. Not long ago, Lordstown Motors also filed for bankruptcy.

These streetcar companies no longer have a good time to lie down and get financing.

Tesla executive blessing Proterra can be regarded as a car circle veteran, founded in 2004, only one year later than Tesla, but at present, the gap between the two is already very different.

Proterra, headquartered in Burlingham, California, initially positioned as an electric car parts supplier, launched the first electric bus EcoRide four years after its establishment. At the time, officials said it was the world's first heavy-duty, fast-charging battery-powered bus.

Source: Proterra, however, its electric bus didn't sell well in the early days. After selling it for four or five years, its electric bus sold in double digits.

Then Proterra began to absorb Tesla's talents. In 2014, Ryan Popple, a former senior financial officer of Tesla, joined the company as CEO. His CTO Dustin Grace worked in Tesla's battery department for eight and a half years, along with six other managers from Tesla's battery team.

Therefore, the title of "Tesla of the bus sector" is not empty talk. Tesla has transferred a lot of talents to it.

After Tesla senior executives joined, the situation of Proterra began to improve, and the technical development route of commercial vehicle power battery system formulated by the company followed Tesla's battery system technology route.

But unlike Tesla, Proterra did not use Tesla's aluminum wire bonding technology, but laser welding, and they also decided to develop their own battery technology and power system.

In 2016, Proterra launched the Catalyst E2 electric bus with a battery capacity of 440-660 kWh, a full charge of only 3.5-5 hours and a maximum range of 350 miles. You know, the same period of Model S, full electricity can only travel 315 miles.

In 2015, Proterra diversified its business. According to regulatory documents, there are three main businesses: the production of electric car batteries; the second is charging stations and energy management; and the third is the production of complete electric buses.

Source: Proterra the company's battery systems division has also expanded to cover trucks other than buses, off-road equipment used in construction and mining, and even Class 8 and a half trucks.

At that time, it was agreed that the most successful Proterra should be battery research and development. But in fact, by the end of 2022, most of the company's revenue came from electric bus sales. When Proterra was most popular, the electric bus business accounted for 50% of the market in North America, making it the number one electric bus company in North America.

In addition, Proterra has installed more than 100MW charging infrastructure for heavy electric vehicles to support commercial fleets in North America.

And Proterra has partnered with a number of city governments to see Proterra buses in San Francisco's Muni and Napa counties, Santa Cruz counties and Santa Rosa.

Source: in Proterra2017, Proterra also dabbled in self-driving, announcing a partnership with the University of Nevada to launch an autopilot program and developing self-driving electric buses in Reno, west of Nevada, mainly for the public.

In the Proterra financing road, including BMW, Daimler truck, Franklin Templeton and many other investors. In January 2021, Proterra announced a merger with ArcLight Clean Transition Corp, a special purpose acquisition company, seeking a curve listing.

At the time of the IPO, the share price soared from $10 to $31.06, and then valued at close to $4 billion.

But what people did not expect is that the listing of Proterra is the peak, which has been going downhill for two years.

In addition, although the company's main source of revenue is the sale of electric buses, it has produced only about 1000 electric buses since 2010, according to documents filed by the Securities and Exchange Commission in March. Today, the company has not achieved or maintained a positive gross profit margin or profitability.

02. Why did you come to this point? The defeat of Proterra has long been apparent.

In January, Proterra announced that it would cut about 300 jobs and merge its electric bus and battery production operations in South Carolina in an effort to cut costs, but the move did not change the outcome of bankruptcy.

As for the reasons for the bankruptcy of Proterra, it can be summarized as the poor market environment and the wrong route of self-rescue.

In a bankruptcy statement, CEO Joyce attributed the bankruptcy to "market and macroeconomic headwinds", while the company's bankruptcy was the result of a struggle in the technology industry.

Source: Proterra indeed, in the past two years, the supply chain of the electric vehicle industry has been very tight, the rising price of raw materials and the shortage of chips have been the shadow of auto people, and demand has slowed further, adding to the operating difficulties of start-ups for a variety of reasons.

In addition to the external environment, Proterra's self-rescue approach has also accelerated the pace of bankruptcy.

For example, in order to expand three businesses at the same time, Proterra tried to seek cooperation from cities, especially transportation companies, and in order to win the bid, they decided to reduce the price of their products, but the problem is that the profits of its electric buses are not high, which requires the company to bear further cost pressure.

Generally speaking, contracts are signed 12 to 18 months before the bus is manufactured, and Proterra points out that the contract price signed in 2021 is lower than the manufacturing cost finally realized in 2022. This means that Proterra is in a state of losing one car at a time.

At that time, due to a growing shortage of supply chains and customized requirements for buses by transport companies, it was difficult for the company to expand its business and production plans were repeatedly delayed, and Proterra had to pay part of the fine to TPI Composites, the contract supplier.

With rising costs and the pressure of fines, Proterra began to be overwhelmed.

Judging from the financial results of the past two years, Proterra's revenue has been in the doldrums. The company's total revenue in the first quarter of 2023 was just $80 million, not much better in previous quarters, hovering below $100 million.

Source: what is the concept of Proterra? ideal just released its Q2 financial report a few days ago, with a total quarterly revenue of 28.65 billion yuan. Compared with these manufacturers who are prone to tens of billions of yuan, Proterra is unable to move an inch.

According to documents submitted to SEC in March, the company had a cumulative deficit of $1.1 billion at the end of 2022.

In this case, Proterra's homing net profit has been negative, rising in all quarters except for $36 million in the third quarter of 2021. In the first quarter of this year, Proterra reported a net profit of-$244 million, up from-$238 million for all of 2022.

Source: Proterra's delivery performance is also very poor, delivering only 199 new buses and 1229 car battery systems in 2022.

Even so, Proterra intends to continue the business, and when it applied for protection voluntarily, the company said it would maintain its operation through recapitalization and other means. "the restructuring is designed to maximize the value of each separate line of business," said Shane Levy, a spokesman for Proterra. The restructuring is under way and the final outcome is unclear.

03. The wave of bankruptcy of new cars abroad has come. Proterra is not the only one that has filed for bankruptcy recently. Many electric car companies are in dire straits.

SPAC listing has been very popular since 2020, and it is also a common listing method in the field of electric vehicles, such as Nikola, Lordstown Motors, Lucid Motors, Fisker and Faraday Future, which are all listed through SPAC.

However, few of these electric car companies are doing well.

Electric Last Mile Solutions (ELMS), which went public with Proterra in the same year, sadly declared bankruptcy in the last June, only one year after it went public.

Source: the scripts of ELMS and Proterra are roughly the same. ELMS shares soared after the IPO, reaching $14 at one point, but then plummeted after the peak. Falling below $1 on April 27, 2022, coupled with the resignation of both CEO James Taylor and founder Jason Luo due to investigation, the company has completely lost its operating foundation.

In June this year, the Lordstown, a newly built car in the United States, also filed for bankruptcy protection. Shortly after the new car company went public, it was accused by short sellers of using fake orders and fake delivery times for electric pickups, which led to Lordstown being investigated by the US SEC.

Source: the direct trigger for LordstownLordstown's bankruptcy was the collapse of the agreement with Foxconn, which caused a dispute between the two sides. The lawsuit has so far been inconclusive, and Lordstown is still appealing Foxconn when it filed for bankruptcy protection in June.

And the first batch of Nikola listed through SPAC, its truck caught fire twice in a row, so that the already uncertain development of Nikola once again fell into a whirlpool of public opinion. In early June, Nikola received a delisting warning because its share price was below the minimum requirement of $1.

In addition, Arrival, a new car maker preparing to go public, suspended its second SPAC merger last month. It was thought that Arrival would receive $283 million in trust cash after the merger, but with the termination of the SPAC merger, Arrival's life-saving money would be gone.

Source: Arrival is not only these car companies, Fisker, Canoo and other new car companies are not doing well, they also face the problem of shortage of funds and lack of hematopoietic capacity.

At present, this new energy reshuffle is not over, Proterra will not be the last American electric car company to fall, who will be next?

This article is from the official account of Wechat: Superelectricity Lab (ID:SuperEV-Lab), author: Cao Tingting

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