Proterra Got Millions in US Aid Before Bankruptcy
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Proterra Inc., the electric bus maker touted by President Joe Biden that filed for bankruptcy this week, was the recipient of millions of dollars in COVID relief government aid.
The Burlingame, Calif.-based company was awarded a $10 million loan from the Paycheck Protection Program in 2020 that was forgiven in May 2022, according to a company filing Aug. 9. Proterra reported it as a net gain of $10.2 million after interest payments were refunded by the Small Business Administration, the Securities and Exchange Commission filing said.
The COVID relief aid came on top of other federal government incentives and support for the electric bus industry more broadly, as well as repeated shout-outs for the company from Biden. Proterra was also widely expected to benefit from new demand for electric buses fostered by last year’s infrastructure and climate laws, including more than $5 billion earmarked for replacing existing buses with zero-emission models and new tax credits for battery and clean-vehicle manufacturing.
The White House and the Small Business Administration didn’t immediately respond to a request for comment. An administration official said policies championed by Biden and other Democrats were responsible for an increase in electric vehicle demand and pointed to a Cox Automotive study that said EV sales hit a record high last quarter.
The nearly 20-year-old manufacturer of electric buses and batteries was valued at $1.6 billion when it went public in June 2021 and has drawn praise from Biden, who went on a virtual tour of a company facility earlier that year amid White House plans to electrify the nation’s fleet of transit and school buses.
In February, Biden appointed Proterra CEO Gareth Joyce to the President’s Export Council. Energy Secretary Jennifer Granholm served on Proterra’s board from 2017 until she became secretary and sold her stock in the company in May 2021, providing her with a net capital gain of $1.6 million following criticism from the GOP.
Biden, Apr. 20, 2021, to Proterra: "When you start making a thousand busses a year, you're going to need more room for customers" pic.twitter.com/DQ5hrYLPHt — Tom Elliott (@tomselliott) August 8, 2023
The company filed for Chapter 11 bankruptcy protection in Delaware Aug. 7, saying in a statement it was facing “market and macroeconomic headwinds.” The company, which said it plans to either recapitalize its businesses or sell them off, has seen its shares plunge 90% since the announcement.
A spokesman for Proterra said the loan “supported our ability to maintain a full workforce as we navigated the uncertainty caused by the COVID-19 pandemic.”
In its SEC filing, Proterra said it expected the billions of dollars in funding for electric buses would “remain an important factor in our company’s growth prospects,” but didn’t note receiving any funding from either the infrastructure or climate laws directly.
— With assistance from Jennifer A. Dlouhy.
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