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EV maker Electric Last Mile Solutions files for bankruptcy

Data: Yahoo Finance; Chart: Simran Parwani/Axios

Axios was the first to report this month that EV startup Electric Last Mile Solutions was almost out of money. Now it's official: The SPAC-backed company has filed for Chapter 7 bankruptcy protection.

Why it matters: The company once had a valuation of $1.4 billion. Its swift demise is yet the latest sign that SPAC investors face a rough road ahead.

What's happening: Electric Last Mile Solutions issued a statement late Sunday night that it plans to liquidate.

  • The company in March disclosed that it was facing an SEC investigation — in turn causing its stock price to drop by nearly half.
  • CEO Jim Taylor and founder Jason Luo resigned the month before following an internal investigation.
  • Those developments "made it extremely challenging to secure a new auditor and attract additional funding," the Michigan-based company said in its statement.

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

  • Lordstown Motors, one of the first EV companies to go public via SPAC, issued a going concern warning to investors on its most recent earnings call.
  • Others former SPAC-ers like Nikola have faced setbacks such as lawsuits and executive departures in addition to tanking share prices as challenges mount against the industry as a whole.

Meanwhile: Polestar, a Volvo spinoff, last month saw the SEC approve its SPAC merger with Gores Guggenheim.

  • The EV company will trade on Nasdaq under ticker PSNY.
  • Gores Guggenheim's stock price has sagged slightly since the SPAC was announced last fall.
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