Recently, the well-known U.S. electric bus manufacturer Proterra announced that it would seek bankruptcy protection from the Delaware federal court. As a result, the company's stock price fell more than 88%. Proterra is regarded as "electric bus field of Tesla", the U.S. government has provided tens of millions of U.S. dollars in assistance, behind the BMW, General Motors and other giants of the injection of capital, the market value of once close to $ 4 billion. But who had thought that the "collapse" came so fast, the application for bankruptcy, from the Prothera listed only two years ago, and this also gives the global bus companies sounded the alarm. 01
From the peak to the fall
Prothera was founded in 2004, headquartered in Burlingame, California, the United States, its initial positioning is an Electric Vehicle parts supplier, was established four years later, the launch of the first electric bus EcoRide. In 2011, Prothera's first factory began operation, and the EcoRide went through a number of improvements and upgrades, expanding its product line from city buses to school buses, delivery trucks, and long-distance buses. However, sales of the series were dismal, with only 50 electric buses sold by 2013. In 2014, Prothera's operations began to improve with the addition of Tesla executives, and around 2015, Prothera launched a new product line, Catalyst, which is more premium, more technologically advanced, and more expensive than EcoRide. At the same time, Prothera also carried out a series of reforms, so that it gradually got out of the dilemma, sales increased significantly. The official website shows that up to now, Proterra has delivered more than 1,300 buses to more than 135 transport agencies in 43 U.S. states and Canadian provinces. The enterprise continues to improve, naturally attracting the attention and favour of many investors. According to the statistics of relevant institutions, in the past ten years, Prothera has obtained no less than 20 times of financing, and the amount of financing before listing is about 1 billion U.S. dollars. Its investors are an all-star lineup, including G2VP, Capgemini, Constellation Ventures, Mitsui & Co, BMW Ventures, Edison Energy, the U.S. Federal Transit Administration, General Ventures and Tao Capital Partners. In addition, Prothera has also "caught up" with the U.S. carbon emissions reduction policy, which has helped its new energy buses sell well. In 2021, Prothera through the SPAC method of listing, after the listing of the share price once from about 10 U.S. dollars soared to 31.06 U.S. dollars, the valuation of nearly 4 billion U.S. dollars. However, in the two years since then, Prothera has continued to go downhill, and its defeat has gradually become apparent. In January of this year, in an effort to reduce company costs, Proterra announced that it was laying off 300 employees and merging its electric bus and battery manufacturing operations in South Carolina. Even so, the company did not escape the end of the "fall in a hurry".
02
Why on the brink of bankruptcy
Bet by a number of well-known investment institutions, and ride on the "oil for electricity" windmill, why Prothera to the brink of bankruptcy? In the opinion of industry experts, the fall of Prothera can be roughly attributed to three reasons: First, in the external environment, over the past two years, rising raw material prices, chip shortages, as well as the new crown epidemic triggered by supply chain bottlenecks, so that the U.S. automotive industry has been hit hard, rising costs and demand for a further slowdown, exacerbating the business difficulties of commercial vehicle enterprises. Second, on internal factors, Prothera's main source of revenue is the sale of electric buses, but a dismal reality is that its bus sales are not satisfactory due to its own technology and the customised needs of its customers. So far this year, Prothera has delivered a total of 1,000 electric buses, a significant portion of which are second-hand vehicles refurbished after recycling, while new vehicle sales are only around 550. The declining order quantity is difficult to support the normal operation and development of the company. In addition, the difficulty of business expansion and the repeated postponement of the production programme have also made it difficult for Prothera to move forward. From the financial reports of the past two years, Prothera's net profit has been negative. In the first quarter of this year, Prothera's total revenue was only 0.8 billion U.S. dollars, and the net attributable profit was -244 million U.S. dollars, even more than the full year 2022 loss of 6 million U.S. dollars. Notably, Prothera has received several government grants since 2021, such as a multi-million dollar U.S. government anti-epidemic assistance grant and a $10 million loan (which was forgiven from its repayment obligations in May 2022) from the Salary Protection Programme. However, these are like a drop in the bucket for Prothera, which has serious cash flow problems. In this case, Proterra planned to expand all three businesses at the same time and sought co-operation from transport organisations to win orders by lowering the price of its products, but this approach further added to the company's cost pressures, and the wrong approach to self-help accelerated its insolvency. 03
Wave of closures emerge Bus industry urgently need to break the predicament
Listed moment is often the scenery, but the secondary market is more important to the enterprise's ability to make blood. Proterra's exit, but also to a certain extent reflects the new energy bus companies "lying on the financing, money-making" era is gone. Once, many with a "car dream" start-ups, choose to enter the bus industry to show their feet, but often end in failure. They have roughly the same situation: burned out hundreds of millions of yuan of capital, poor profitability, expanding losses. Perhaps see the new energy bus industry is not good "mixed", Volvo announced in June this year, its bus business Nova Bus will withdraw from the U.S. market. Not only the United States, in China's new energy bus industry development and market cultivation process, also appeared in a similar situation. In the early stage of industry development, new energy buses can get high subsidies, and even cover the full cost of the vehicle. Driven by subsidies, many capitals and enterprises pile into the field of new energy buses. According to statistics, during the period from 2015 to 2017, a total of dozens of large and small bus companies were established, and the cross-borderers represented by Gree set off a car-making fever. But in recent years, by the impact of new energy vehicle subsidy policy adjustment, coupled with the bus market serious overdraft, road bus market demand shrinkage, resulting in the bus enterprise profitability level under pressure, many new enterprises fell one after another. Now, with the "national subsidy" comprehensive exit, China's new energy vehicle market has entered a new stage of market-oriented development, the past relies on subsidies to grow up in the new energy bus market is also with the tightening of regulation and gradually return to rationality. However, many bus companies in the product positioning and strategic planning is still stuck in the past market perception, the production of models does not meet market demand. The bankruptcy wave in the United States, once again to the domestic bus industry to bring a wake-up call. "Under the guidance of the 'double carbon' target, the new energy bus market is favoured for a long time, while the competition is also getting more and more intense. In this case, new energy bus companies urgently need to strengthen technological innovation and actively look for sustainable and stable business models so that they can survive in the market."
