WASHINGTON (Michigan News Source) – The much touted battery maker and electric truck and bus manufacturing company, Proterra, celebrated and promoted by Energy Secretary Jennifer Granholm and President Joe Biden, has filed for Chapter 11 bankruptcy protection from a federal court in the state of Delaware even after having the full support of the Biden administration.

The Burlington, California company hasn’t been able to maintain stable financial footing in spite of the Biden administration’s infrastructure and green energy initiatives, including a minimum of $5 billion promised over three years just for electric buses alone coming from Dept. of Transportation grants as well as the Inflation Reduction Act’s spending to help towns convert from diesel buses to electric ones, money available through 2032.

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Earlier in the year, Proterra had cut hundreds of jobs as they combined their electric bus and battery production in South Carolina and tried to restructure their millions of dollars in outstanding debt. They said at the time it was done to better manage ongoing supply-chain disruptions and decrease facilities costs.

In an analysis of Proterra by Seeking Alpha, a news media company for investors, they warned at the end of May that they were staying away from the company due to negative gross margin, heightened competition and dwindling resources.

In their press release about the filing for bankruptcy on Monday, Proterra cited “various market and macroeconomic headwinds that have impacted our ability to efficiently scale all of our opportunities simultaneously.” The statement also says that the company’s bankruptcy filing was to “maximize the value of its business and enhance the potential of each of its product lines” and as an “effort to strengthen its financial position through a recapitalization or going-concern sale.”

JoAnn Covington, Proterra’s chief legal officer, had said last year that the Biden administration’s tax credits and federal grants were an important incentive for businesses like Proterra and that they 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.”

Proterra is also the company that was in the center of a controversy regarding Energy Secretary Jennifer Granholm’s financial stake in the company with her stock ownership. Granholm, who was also on Proterra’s board of directors before becoming energy secretary, sold her shares of Proterra in mid-2021, making $1.6 million in the process. The company’s stock has been plunging for a while as they burned through cash and it plummeted even more, about 65%, after their bankruptcy announcement on Monday.

An Energy Department spokesman said about Granholm’s stock sale, “Secretary Granholm has acted in full accordance with the comprehensive ethical standards set by the Biden Administration and has completed her divestment well ahead of the time required by her ethics agreement.”

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In April of this year, U.S. Senator Josh Hawley (R-MO) questioned Granholm at an Energy and Natural Resources Committee hearing about a Wall Street Journal report that said that hundreds of energy department officials owned stocks related to the agency’s work. She defended her stock purchases and those of the others to Senator Hawley saying, “It doesn’t involve or influence in any way our actions.”

In February, Biden appointed Proterra CEO Gareth Joyce to his Export Council to advise the president on international trade. Biden has been promoting the company throughout his presidency, praising them along with other EV companies like the electric truck company, Rivian, as he pushes his clean energy agenda.

Biden also had a White House event in April of 2021 to promote his infrastructure plan and he spotlighted Proterra, including having the company give a virtual tour of their South Carolina bus manufacturing facility. Biden said, “We oughta to be the most significant suppliers of electric buses and vehicles in the world and you guys are getting us in the game. It’s going to make a lot of difference”

However, the difference hasn’t necessarily been huge in some areas. in 2022, Proterra was only able to deliver 199 electric buses to transit systems across the nation. Barrons reported other parts of the business appeared to be growing including the company delivering 1,229 battery systems in 2022, up 350% year over year.

Proterra said in their statement that they intend to continue to operate in the “ordinary course of business as it moves through this process” and will attempt to keep funding operations including paying employee salaries and benefits, and compensating vendors and suppliers.

Proterra CEO Gareth Joyce contends in the company’s press release that they are at the “forefront of the innovations that are driving commercial vehicle electrification” and are building industry-leading products that their customers want and need. He goes on to say, “The foundation we have built has set the stage for decarbonization across the commercial vehicle industry as a whole, and we recognize the great potential in all of our product offerings to enable this important transformation. This is why we are taking action to separate each product line through the Chapter 11 reorganization process to maximize their independent potential.”