Electric vehicle parts supplier Proterra Inc (PTRA) filed for Chapter 11 protection on Monday to strengthen its financial position through a recapitalization or by being sold.
Company shares fell more than 65% in premarket trading on Tuesday.
- Due to slowing demand, funding and supply chain constraints, electric vehicle parts maker Proterra has filed for bankruptcy.
- Shares fell more than 65% in premarket trading on Tuesday.
- Proterra continues to operate while seeking to strengthen its financial position through recapitalization or by being sold.
Proterra's assets and liabilities, stated in its Delaware Chapter 11 petition, are at least $500 million each. By voluntarily declaring bankruptcy, the business is protected from creditors while it explores repayment options.
Proterra plans to continue operating through the bankruptcy process while using its existing capital to fund its operations. Wages will be paid and vendors will be compensated going forward in accordance with Chapter 11 rules.
EV battery manufacturer will separate each product line throughout the bankruptcy reorganization process to maximize independent potential. Including debt, the company was valued at $1.6 billion as part of a January 2021 merger deal with a blank check company.
Proterra reported losses of $244 million in the first quarter of the year, compared to a loss of $50 million in the same period last year. The company acknowledged its history of losses and admitted during its first quarter results that it may not achieve profitability in the future.
Earlier this year, Proterra cut jobs and costs by combining its electric bus and battery production in South Carolina.
While US consumers want buy For electric vehicles, rising prices pose an affordability problem, according to a Deloitte survey earlier this year. Supply chain issues and funding drought amid sluggish demand have become major challenges for electric vehicle makers. Last month, 2018 EV startup Lordstown also filed for bankruptcy as it sought a buyer who would allow it to restart production.
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