Only a year after going public following a merger with a special purpose acquisition company (SPAC), EV startup Electric Last Mile Solutions (ELMS) has filed for bankruptcy under Chapter 7.
The electric delivery van maker's bankruptcy petition filed on June 14 in the U.S. Bankruptcy Court for the District of Delaware is the first step of a liquidation process the company announced on June 12.
Electric Last Mile Solutions had a market cap of $1.4 billion shortly after it started trading a year ago. At the time, the company claimed to have over 45,000 preorders for its first urban delivery vehicle and planned to build up to 100,000 vehicles every year at GM's former Hummer H2 factory in Mishawaka, Indiana.
While those were encouraging signs, building electric vehicles is an incredibly difficult and expensive undertaking, and ELMS failed to attract additional funding to bring its $28,000 Class 1 electric delivery van to market.
Gallery: Electric Last Mile Solutions Urban Delivery Class 1 Electric Commercial Vehicle
Things started to go downhill for the EV startup earlier this year after the abrupt resignations of President and CEO James Taylor and Chairman Jason Luo. They were forced out of the company after an investigation found they improperly purchased equity in the company before it went public.
Since then, the bad news kept coming from ELMS, including delays in financial reporting, the resignation of its public accounting firm, and the announcement in May that it would run out of cash without more investment.
In the voluntary petition for Chapter 7 bankruptcy, Electric Last Mile Solutions disclosed its estimated assets range from $50 million to $100 million, as do its estimated liabilities.
The company has between 100 and 199 creditors, including large automotive suppliers Continental Automotive Systems and Autoliv Inc, transportation services company Penske, software and financial services firms, and several law firms. The list of creditors also includes Suburban Ford of Waterford, Michigan, and Tesla, at 2800 W. Big Beaver Road in Troy, Michigan, where the world’s biggest EV maker has a showroom inside Somerset Collection.
At the moment, the status of Electric Last Mile Solutions' employees at its headquarters in Troy, Michigan, and at the plant in Mishawaka, Indiana, remains unclear. ELMS announced in March it was laying off 50 employees, or about 25% of its staff.