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A politically-connected electric battery company with deep ties to the Biden administration is in trouble. Proterra could be staring down financial ruin, even though everyone from the president to his cabinet have worked overtime to boost the bus company.
The Biden administration was supposed to be a ticket to ride for California-based Proterra. In 2021, it told shareholders that it was ready to “ride the wave” of taxpayer-funded incentives for vehicle electrification. It had all the right friends in all the right places. It hired a lobbying firm with extensive ties to Democratic politics weeks before Biden toured its facility. Biden’s energy secretary, Jennifer Granholm, was on its board until 2021, and she held millions of dollars of stock while serving as energy secretary until my reporting, and pressure from Congress, forced her to sell it.
After Granholm sold hundreds of thousands of non-public Proterra shares for a profit of over $1 million to an undisclosed buyer (a buyer she promised to disclose, but has never done so), the company merged with the public company Arclight and its stock value cratered. While Granholm netted a pretty penny from her Proterra selloff, other investors haven’t been nearly as lucky.
Following the company’s most recent quarterly report, published this month, its stock tumbled approximately 50 percent almost overnight to a low of $1.14 a share, down from a high of almost $27 a share the week before Joe Biden took office. At that time, the company was privately held as a special purpose acquisition company called Arclight that subsequently went public on the Nasdaq. During the most recent quarterly report, Proterra’s CFO said the company is “disappointed” with its recent gross margin performance.
During the company’s most recent earnings call, its CEO addressed filings the company made with the Securities and Exchange Committee that “include management and auditor reports disclosing material weaknesses in our internal controls.” Those filings, in Proterra’s NT 10-K form, detail that Proterra has “deficiencies affecting multiple processes including but not limited to treasury and accounts receivable, equity and share based compensation, HR/payroll, fixed assets, warranty, inventory, revenue, procurement and debt.”
Following the call, investor confidence in Proterra tumbled. The company scored a minor win in the days following the call, when it announced an amendment to its credit agreement regarding its convertible debt. According to Barron’s, “Proterra had been in violation of rules that required its cash balance to be above a certain level, known as the minimum liquidity covenant… Proterra got some much needed relief from lenders. It came at a price.”
Proterra’s perilous financial standing likely doesn’t concern Granholm, whose blatant conflict of interest would doubtless have generated outrage and front page news in a previous era. Not in the Biden presidency, however. Media Matters for America, a left-wing media referee founded by Hillary Clinton errand boy David Brock, previously paid Granholm hundreds of thousands of dollars for advice prior to her joining the Biden administration. It then leapt to her defense, calling my reporting a “fake scandal,” while refusing to address any of the points about its former consultant.
Despite Media Matters’s gaslighting, Granholm’s relationship with Proterra has had serious consequences; the company recently conveyed concern to its shareholders over its ability to fulfill basic fiduciary responsibilities, sending its stock into an even deeper tailspin.
Part of Proterra’s problems may be that its best connection in the Biden administration is too busy dealing with a series of problems of her own making to truly be able to help. During her contentious tenure as energy secretary, Granholm has run an operation her critics have attacked for its “pattern of ethical issues,” but she hasn’t let the rules get in the way. In one instance, Granholm’s team told me that the energy secretary is too busy fighting climate change to follow the laws she was violating.
On another occasion, Granholm violated the Hatch Act by using her official position to urge Americans to vote for Democrats in an interview with a Democratic megadonor’s daughter. However, there were no consequences for the Harvard Law School-educated former Michigan attorney general, because the special counsel determined that Granholm had no idea what the Hatch Act was, even though she mocked it in the interview where she violated it.
Within weeks of Joe Biden taking office, he toured Proterra, touting it while his energy secretary still owned millions of dollars of its stock. Beyond Biden’s multiple Proterra visits, the company has been promoted by Vice President Kamala Harris, transportation secretary Pete Buttigieg, and, of course, Granholm — who’s spoken at government-funded events with Proterra buses in the background. In November 2021, Granholm threw Proterra a massive bone, speaking at an event where she was flanked by Proterra buses and where over $100 million in government contracts were doled out. Protect the Public’s Trust, a watchdog group, immediately submitted a watchdog complaint, arguing that Granholm’s “flagrant” violation of her ethical obligations needed an immediate review.
Beyond the current top officials in the Biden administration, Proterra’s backers have also included former vice president Al Gore (who has lobbied the Biden White House on green energy initiatives) and the family of Democratic megadonor, Illinois governor J.B. Pritzker. In fact, one of Proterra’s earliest financial backers was Democratic megadonor Chamath Palihapitiya, a controversial billionaire venture capitalist, who called Proterra his “biggest investment in climate change.” Palihapitiya argued that his investment in Proterra was in line with his environmentalist mindset, because the “world’s richest person should be somebody that’s fighting climate change.” While it’s unclear how much Palihapitiya netted, non-megadonor shareholders were greeted with the latest round of rough news straight from the company’s leadership.
Additionally, Biden’s former director of the National Economic Council, Brian Deese, was poised to indirectly benefit from Proterra’s rise due to his massive financial stake in Blackrock, the finance giant which was one of several investment firms that pumped a combined $415 million into the Proterra merger.
Like Biden, Granholm, Harris and Buttitigeg, Deese also toured the company in his official administration role. Proterra’s former CEO, Jack Allen, was a featured speaker at multiple Biden administration conferences — in one of them, Biden national climate advisor Gina McCarthy even asked Allen “what role” the federal government could play in “spurring the demand for zero-emission electric vehicles, including school buses.” At that event, McCarthy lavished praise on Proterra, saying that “Proterra manufactures half of the US’s electric bus market, which is pretty amazing.” Granholm also spoke at the summit.
The company’s political connections haven’t been enough to offset the problems with the product, however. In Juneau, Alaska, Proterra was “sputtering” and a “bust” with major technical difficulties. At issue was “a faulty wiring harness that the transit agency has repeatedly tried to fix but sometimes still disables one of the bus’s two motors.” Proterra’s problems were enough to force the city to shelve the buses, but Juneau is not done with electric battery buses; it’s just done with Proterra, choosing instead to go with one of its rivals, Gillig, moving forward.
Juneau’s Capital Transit Superintendent Rich Ross was not a fan of Proterra. “While this bus has been a lemon — somewhat of a lemon — we also understand the technology is improving in leaps and bounds as time goes on.” Beyond the wiring problems Proterra faced, Ross said that its promised 210-mile range is more than double what it actually can yield in practice, and that Proterra hadn’t supplied him with the spare parts he requested.
It’s not just cold weather that poses problems for Proterra. Philadelphia public radio station WHYY reported that the city’s Proterra fleet was in shambles in 2021, and that at one point it removed its entire fleet of Proterras from service. Just like in Alaska, Proterra’s batteries weren’t up to task, in even the easiest routes. “Even those routes needed buses to pull around 100 miles each day, while the Proterras were averaging just thirty to fifty miles per charge,” WHYY’s Ryan Briggs wrote. “Officials also quickly realized there wasn’t room at the ends of either route for charging stations.”
In Duluth, Minnesota, city officials waited three years for Proterras but pulled them from service because “their braking systems were struggling on Duluth’s hills, and a software problem was causing them to roll back when accelerating uphill from a standstill,” the Duluth Monitor reported. In California, a Proterra bus fire prompted city officials to consider shelving its entire electric bus fleet, and in 2015, a Proterra prototype caught fire and exploded, the Greenville News reported.
The story of Proterra raises critical questions about an entire industry, plagued by conflicts of interest, that seeks to sell the American public on the idea that powerful, politically connected politicians should be granted the right to capitalize on the wholesale rewiring of the American economy using technology seems not to work as promised. Meanwhile, retail investors are now left holding the bag on an investment they were convinced by those same leaders would lead to profit based on political connections and lofty promises. The question now is whether those same investors were misled, or whether they shouldn’t have allowed themselves to be sold on progressive utopianism in the first place.
For all the talk about an “equitable” green energy “transition,” it seems that the only ones that capitalizing on it are the same well-connected liberal billionaires bankrolling the political ambitions of the Democratic Party.
