EV maker Electric Last Mile Solutions files for bankruptcy
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.