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Climate tech SPACs struggle in choppy market

Katie Fehrenbacher
Illustration of a blank check with a magnifying glass hovering over it, revealing a one hundred dollar bill within the glass

Illustration: Annelise Capossela/Axios

Climate companies that jumped on the SPAC boat are struggling to navigate the market's choppy waters.

Why it matters: These companies, many without a sure path to profitability, are seeing their stock prices plummet and the specter of bankruptcy hanging over them. Even companies with high-demand products are floundering.

Driving the news: Electric bus maker Proterra is the latest and one of the most prominent climate SPACs to fall. The company filed for Chapter 11 protection this week.

  • A day later, Energy Vault, which makes gravity-based grid storage, reported a quarterly net loss of $26.2 million. The six-year-old company has not generated a profit to date, and its stock has dropped from more than $18 per share to around $3 per share.

Big picture: The list of struggling companies in the space goes on.

  • EV manufacturer Electric Last Mile Solutions declared Chapter 7 bankruptcy in June 2022, a year after going public via a SPAC.
  • Fellow EV maker Lordstown filed for bankruptcy protection shortly after it too went public through a SPAC.
  • Other struggling EV companies include Nikola, Canoo, Fisker, Workhorse, Lucid, Faraday Future and Lion Electric.

Thought bubble: Many of these EV makers should never have gone public, but the companies wanted to raise funds and investors wanted exits.

  • Listing shines a brighter spotlight on a company's financials, and these early-stage manufacturers weren't ready for the scrutiny.

What's next: More company failures.

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