Biden praised Proterra, but it filed for bankruptcy.
Biden’s Praise for Green Energy Company Backfires as it Declares Bankruptcy
A Proterra electric bus in service in Philadelphia in 2019 / YouTube Screenshot
President Joe Biden enthusiastically endorsed the company. Its top executive even secured a position on a White House board. Meanwhile, Energy Secretary Jennifer Granholm held a significant number of shares in it.
However, all of this support couldn’t prevent Proterra, the electric vehicle manufacturer known for its unreliable buses, from filing for bankruptcy. Proterra cited “various market and macroeconomic headwinds” as the reason for its Chapter 11 filing, which followed significant job cuts and debt restructuring earlier this year.
This bankruptcy declaration is a major blow to Biden’s favored green energy company. In April 2021, Biden participated in a virtual tour of a Proterra facility to promote his $1.9 trillion infrastructure plan, which included substantial funding to boost the electric bus industry. During the event, Biden expressed his confidence in Proterra, stating that they were “getting us in the game” and predicting their success in shaping the future of electric vehicles. He continued to praise Proterra in a speech in March 2022 and appointed Proterra CEO Gareth Joyce to serve on the President’s Export Council in February 2023. Granholm’s ownership of 240,000 shares in the company at the start of her tenure raised ethical concerns.
While Proterra’s shares plummeted by over 60 percent in after-hours trading on Monday, Granholm managed to sell her shares for $1.6 million in May 2021, shortly after Biden publicly endorsed the company. Based on Proterra’s current share price, her shares would now be valued at just $340,000.
Biden’s unwavering support for Proterra, coupled with Granholm’s financial stake in the company, has drawn comparisons to the Solyndra scandal. Solyndra, a solar panel manufacturer, went bankrupt after receiving a $535 million loan guarantee as part of the 2009 Obama-Biden stimulus package. President Obama had praised Solyndra during a tour of its facility in 2010, only for the company to shut down in 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,” said Senator Ted Cruz (R., Texas). ”President Biden and Secretary Granholm should immediately remove themselves from their glaring conflict of interest.”
Proterra stood to benefit significantly from Biden’s infrastructure and green energy initiatives, which included billions of dollars in spending on electric buses alone. The Inflation Reduction Act, Biden’s flagship climate bill, also allocated funds to help cities transition from diesel buses to electric buses, providing 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 crucial for the company. These grants would accelerate the adoption of battery-electric and zero-emissions vehicles in various commercial sectors.
However, many Proterra customers had negative experiences with the company’s buses. For example, a Michigan school district that invested heavily in Proterra buses reported numerous performance issues and significant downtime. Similar challenges were faced by school districts in other states, making it a challenging experience for the school bus market.
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