The California-based electric bus manufacturer filed for bankruptcy on Tuesday, to the surprise of many investors. President Joe Biden had touted the company's environmentally friendly approach to public transportation several times, but it had failed to gain enough traction to justify its operations. While Proterra CEO Gareth Joyce alleged that the company failed due to"various market and macroeconomic headwinds," other economic forces may have contributed to its fall.
"These transit agencies demand highly customized buses that align with the other buses in their respective fleets," Proterra wrote in a filing."Therefore, the manufacturing process requires much customization, which makes scaling the business difficult and requires an extensive amount of working capital."
The company's nickel-based battery chemistry may have also unnecessarily increased the cost of the product's creation, Nikolaos Soulopoulos, head of commercial transport research at BloombergNEF, told Semafor. The company spent $6.5 million more on materials in its first quarter than the revenue the product generated.
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