Jun 13, 2022 - Economy

EV startup Electric Last Mile Solutions files Chapter 7 bankruptcy liquidation

Nathan Bomey

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.

EV maker Canoo, another SPAC cautionary tale, told investors in May there was "substantial doubt" about its own ability to continue as a going concern, Axios Pro's Megan Hernbroth wrote this month.

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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EV startup Electric Last Mile Solutions files Chapter 7 bankruptcy liquidation

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