California Based Electric Bus Company Proterra Stuns With Bankruptcy Filing

The Washington Post recently reported that California-based Proterra, the electric bus company filed for bankruptcy last week. This is like a flashback to Solyndra, a solar panel start-up and recipient federal funds from the 2009 American Recovery and Reinvestment Act (ARRA). Solyndra blew $570 million taxpayer dollars before it folded.

“Solar panel start-up Solyndra was the first company to get government-backed loans from ARRA after its passage, collecting $535 million and receiving a $25 million tax break from California’s agency for alternative energy,” Forbes reported.

From a review of documents via a well placed source, the Globe has learned:

California-based Proterra has voluntarily filed for protection under Chapter 11 of the U.S. Bankruptcy Code in the District of Delaware. Chapter 11 is a business reorganization.

Henrik Alex, a trader, expected Proterra’s default sooner than August: “While I expected the company to default on its convertible debt back in March already, Proterra actually managed to amend covenants and extend the maturity date of the notes shortly after my article was published.”

Apparently so did the U.S. Energy Secretary according to media reports. Politico reported:

“Energy Secretary Jennifer Granholm sold her holdings in electric bus maker Proterra this week, DOE confirmed to POLITICO on Wednesday, following criticism from Republicans that she might be profiting from the administration’s push for electric vehicles.”

“Granholm cleared all of her Proterra holdings in the sales on Monday [May 22, 2023], providing her with net capital gains of $1.6 million.”

Proterra received a lot of grants and tax credits

In 2015, Proterra received a $3 million state grant to build a factory.

In 2017, Proterra was awarded a California Competes tax credit worth $7.5 million ($4.5m was later recaptured because the company defaulted on the agreement).

In 2020, Proterra received a $10 million PPP loan that was later forgiven.

In 2018, Proterra contributed more than $10,000 to groups opposing the repeal of the gas tax increase.

The CEO has contributed $2,750 to Democrat state candidates Josh Becker, former Senator Kevin de Leon, and Sen. Henry Stern:

So far this year, Proterra has spent more than $36,000 on state-level lobbying:

In 2021-22, Proterra spent more than $300,000 on state level lobbying:

Proterra also lobbied the Biden Administration ahead of the President’s visit to Proterra’s plant. The Washington Free Beacon reported:

Weeks before President Joe Biden boosted Proterra with an official tour of its plant, the electric battery company hired a pair of Obama administration alums to lobby the White House for funding, amplifying its already concerning political connections to the Biden administration.

According to disclosure forms filed in 2021, the politically connected electric bus manufacturer brought on lobbying firm Boundary Stone Partners on April 1 to push the administration for increased funding of clean energy infrastructure projects, including the “electrification” of mass transportation vehicles. The two lobbyists registered to Proterra, Pete Gould and Christine Turner, both worked in the top echelons of the Obama administration—Gould was associate director of government affairs for the Department of Transportation, and Turner held numerous trade-related positions throughout the administration, including on the White House National Security Council.

Just 19 days after the firm was brought on, Biden and his top economic adviser Brian Deese toured Proterra and pledged that the administration’s infrastructure plan would direct money to the company.

• In 2019-20, Proterra spent more than $280,000 on state-level lobbying:

• In 2017-18, Proterra spent $256,000 on state-level lobbying:

The Globe has been told California Strategies & Advocacy lobbied on behalf of Proterra in the State Capitol and state agencies.

“I think they should give all of the money back,” Former Ambassador to Germany and Director of National Intelligence Ric Grenell told the Globe. “I think every single politician who received money should give every cent back.”

And because the US Energy Secretary invested in Proterra, and they had a number of federal contracts, there may interest on the federal level to investigate. The Globe isn’t holding its breath that the California Attorney General will investigate.

It will be interesting to see who they contributed to within 90 days of the bankruptcy filing as the court will usually claw back monies spent during that time period.

Looking at their list of creditors, they owe the following agencies – We are betting at least one of them is going to want answers:

California Air Resources Board

California Attorney General

CA Board of Equalization

CA DMV

CA Department of Tax and Fee Administration

CA Energy Commission

CA Franchise Tax Board

CA State Board of Equalization

CA State Controller’s Office

University of California, San Diego

University of California, Irvine

Secretary of State of California

California Department of General Services

Since Proterra filed a Chapter 11 business reorganization, they could be saved by private investors if their infrastructure is decent – but I’m not holding my breath – too many government subsidies and not enough free market interest I am deducing.