California-based Proterra said in court filings that it is struggling with how to generate revenue while delivering the individually designed buses that customers want.
“Our best-in-class EV and battery technology has set the industry standard, but we are facing a variety of market and macroeconomic headwinds that have made it difficult for all of us,” said Gareth Joyce, CEO of the company. It impacts our ability to simultaneously and efficiently scale opportunities.” News release announcing bankruptcy.
Protera has said it plans to stay in business after bankruptcy, but said some transit agencies that ordered the buses are guaranteed to receive them.But the company’s uncertain future poses new hurdles for the nation As Washington’s leaders and transportation officials look to act as quickly as possible to meet their greenhouse gas emissions reduction goals, the transition to electricity is imperative.
Melinda J. Metzger, executive director of Chicago suburban bus network Pace, said the industry can’t afford to lose a big maker.
“If there are fewer manufacturers, there will be more backorders and we will not be able to put these buses on the road.
Bipartisan Infrastructure Act Provided $5.5 Billion for Low-Emission, Zero-Emission Buses Over Five Years, with Billions More Made Available Through Other Federal Subsidy Programs Backed by the Act . The Biden administration has touted success in attracting funding to transportation agencies that need help replacing aging diesel buses with electric models costing about $1 million each.
A year ago, the Federal Transportation Administration announced a subsidy to double the number of zero-emission buses on the road.But it will take time before the funds are made available to passengers. bus.According to figures compiled by trade publication Metro, the delivery record of electric buses fell 20% last year Nonetheless, federal officials say they expect half of new buses to be zero-emissions by 2025, as transportation weathers the effects of the coronavirus pandemic.
Protera was founded in 2004 and sold its first bus five years later. As a major player in the small-scale industry, Protera has drawn the attention of federal officials focused on climate-friendly initiatives.Biden virtual tour The company will close its South Carolina manufacturing plant in 2021 and appointed Joyce to its trade advisory board this year.
“You’re making me look good,” Mr. Biden said during a virtual tour, as part of an effort to advance the economic plan that underlies the Infrastructure Act. “I’m serious. I have overwhelming confidence in American companies.”
Protera said in its bankruptcy filing that it had delivered 1,000 electric buses, including 199. Last year, government agencies stepped up the switch to battery power. Loaned by $10 million under a pandemic-era paycheck protection program, the company was backed by federal funds that were later waived. Protera also hoped to receive a battery production tax credit from the administration’s flagship environmental law, the Inflation Control Act.
But even as the bus business grew and Protera expanded into other areas of its electric vehicle business, the company was showing signs of trouble. In January, the company announced plans to close its City of Industry, Calif., factory and consolidate its operations in South Carolina, at the cost of 300 jobs.
Earlier this month, the company announced that it would file for bankruptcy “with the aim of strengthening its financial position through recapitalization and the sale of going concern.”
Buying a bus is different than picking a car off the dealer’s premises. Transit agencies go through an extensive procurement process, often applying for federal grants and working with manufacturers to customize their buses. It can take a year or more from the time a contract is signed until payment is made to the manufacturer.
In the court documents supporting the bankruptcy, Joyce wrote that the delay caused Protera to contract below its manufacturing costs in 2021 the following year as inflation rose. Supply chain disruptions compounded the problem, affecting the entire automotive industry.
“Because of the highly customized nature of buses, even minor delays or disruptions can cause significant inefficiencies in production efficiency,” Joyce wrote.
Fox Advisors analyst Steven Fox, who recently met with Joyce, said the bankruptcy came as a surprise because, in his view, the company has a path to profitability.
“I am surprised by this decision,” Fox said. “It wasn’t growing at a super fast pace, but it was growing.”
Transportation agencies looking to purchase buses powered by batteries or hydrogen fuel cells have few options. Gillig and New Flyer are his two biggest manufacturers, producing diesel and natural gas models alongside zero-emission buses. Protera and Chinese company BYD have offered alternatives, but lawmakers have blocked BYD from receiving federal transportation funds in 2021, citing security concerns.
Protera’s bankruptcy follows Swedish automaker Volvo’s announcement in June that it would end its bus business. Nova Bus plans to exit the U.S. market by 2025 and close its plant in Plattsburgh, New York. The company said it made the decision after repeated financial losses.
Executives at Canada-based New Flyer also say they’ve faced challenges in recent years, though not as much as Protera.
Jennifer McNeil, the company’s vice president of public sector sales and marketing, said the infrastructure act’s funding is making the transition to electricity faster than expected. McNeill said the company had struggled to get microchips and electronic components, but said those difficulties were easing.
“What we are facing is trying to get back to pre-pandemic production levels,” she said. “The market is there. The order book is there.”
Newflyer spokeswoman Amanda Wanke said the company is also working with the United States. Government officials are considering changing the law on how federal funds are paid to manufacturers, which could make it easier for the company to tackle complex bus fleet electrification projects.
In a statement, the FTA said the FTA and the Biden administration “are committed to transforming our transportation system as quickly as possible to provide safer, more reliable and cleaner transportation for the American people.” Ta.
Christoph Spierer, head of planning at consulting firm Juit Zollers, points out the complexity of building charging infrastructure and designing suitable routes for battery-powered buses, urging transport agencies to be cautious about the transition. did.
He said he doesn’t think Protera’s bankruptcy will change things much, as the industry has experienced turmoil in the past and what he considers to be established companies have exited.
“I don’t look at this and say, ‘If you have Proterus or you’re doing procurement, you should be worried,'” he said.
