EV startup Electric Last Mile Solutions files Chapter 7 bankruptcy liquidation
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."