President Joe Biden promoted the company. Its top executive landed a spot on a White House board. And Energy Secretary Jennifer Granholm held hundreds of thousands of shares in it.
But that wasn't enough to save Proterra—the electric vehicle maker whose buses routinely failed to stay on the road—from declaring bankruptcy. Proterra cited "various market and macroeconomic headwinds" in a Chapter 11 filing on Monday, which came after the California-based firm cut hundreds of jobs earlier this year and restructured hundreds of millions of dollars in outstanding debt.
The declaration marks a stunning downfall for Biden's favorite green energy company. Biden took part in a virtual tour of a Proterra facility in April 2021 to promote his $1.9 trillion infrastructure plan, which included billions to boost the electric bus industry. Biden said during the event that Proterra was "getting us in the game" and predicted that Proterra and other electric vehicle companies would "end up owning the future." He went on to praise Proterra in a March 2022 speech, and less than one year later, in February, the Democrat appointed Proterra CEO Gareth Joyce to serve on the President's Export Council, which provides advice on international trade. Energy Secretary Jennifer Granholm, meanwhile, held 240,000 shares in the company at the start of her tenure, prompting ethics concerns.
While Proterra shares tumbled more than 60 percent in after-hours trading Monday, Granholm will not have to worry about losing her investment. Granholm, who served on Proterra's board of directors, sold the shares for $1.6 million in May 2021, weeks after Biden publicly touted the company. Granholm's shares would be valued at just $340,000 based on Proterra's current share price.
Biden's praise for Proterra—and Granholm’s financial stake in the company—drew comparisons to Solyndra, a solar panel maker that went bankrupt after receiving a $535 million loan guarantee as part of the 2009 Obama-Biden stimulus package. President Obama promoted Solyndra during a tour of its Fremont, Calif., facility in April 2010, saying the company was "leading the way toward a brighter and more prosperous future." The company shut down in August 2011.
"President Biden's decision to heavily promote a business where his energy secretary holds a multimillion-dollar stake has all the potential to be even worse than Solyndra," Sen. Ted Cruz (R., Texas) told the Washington Free Beacon after Biden's virtual tour of the company. "President Biden and Secretary Granholm should immediately remove themselves from their glaring conflict of interest."
Proterra stood to rake in millions from Biden's infrastructure and green energy initiatives, the former of which included at least $5 billion in spending on electric buses alone. Biden's flagship climate bill, the Inflation Reduction Act, also includes spending to help cities convert from diesel buses to electric buses, a major incentive for companies like Proterra.
JoAnn Covington, Proterra's chief legal officer, acknowledged last year that tax credits and federal grants under Biden's bills were a major incentive for the company. Grants to purchase electric buses and to create electric vehicle charging infrastructure would "open up opportunities to accelerate adoption of battery-electric and zero-emissions vehicles to all the other commercial segments on the cusp of being electrified," Covington said.
But many Proterra customers had negative experiences with the company's buses. A Michigan school district that spent big on buses with Proterra batteries and drivetrain technology, for example, said during an April presentation that the buses had "a lot of downtime and performance issues" and weren't "fully on the road."
"I have a number of colleagues in different states who are facing similar challenges," a district official said during the presentation. "For the school bus market, it's been challenging for us."