Jun 13, 2022 - Economy & Business

EV startup Electric Last Mile Solutions files Chapter 7 bankruptcy liquidation

A gray van on top of a vehicle-hauler
An electric van is loaded onto a truck outside the Electric Last Mile Solutions facility in Mishawaka, Indiana, on Sept. 28, 2021. Taylor Glascock/Bloomberg via Getty Images

Electric Last Mile Solutions plans to liquidate about a year after a SPAC deal tagged the electric vehicle startup with a $1.4 billion valuation.

Why it matters: Upstart EV companies face questions over their ability to compete with established automakers, which have long track records of vehicle development, supply chain expertise and manufacturing knowhow.

Driving the news: Troy, Michigan-based Electric Last Mile filed for Chapter 7 bankruptcy Sunday, about four months after the company's top two executives resigned amid questions about their stock purchases.

  • The SEC is investigating the matter.
  • "Unfortunately, there were too many obstacles for us to overcome in the short amount of time available to us," interim CEO Shauna McIntyre said in a statement.

The big picture: Axios Pro Climate Deals was the first to report this month that Electric Last Mile was almost out of money.

Our thought bubble: EV startups have little margin for error. One misstep can be devastating.

  • Carsten Breitfeld, CEO of EV startup Faraday Future, told Nathan in May: "My honest view is there are too many startups around and not all of them will make it because, at the end of the day, it's a very hard job."
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