Final mile for Electric Last Mile Solutions
By Chad Elmore13 June 2022
EV OEM files for bankruptcy
Electric Last Mile Solutions Inc., a commercial electric vehicle company focused on “redefining productivity for the last mile,” has announced its plans to liquidate its assets through a Chapter 7 bankruptcy.
In February 2022, following the resignations of Jim Taylor, the company’s former Chief Executive Officer, and Jason Luo, the company’s founder and former Executive Chairman, the company appointed board member Shauna McIntyre as interim CEO and president, in part because of her automotive experience.
The ELMS board and the new leadership team under McIntyre launched a comprehensive review of the company’s products and commercialization plans, instilled a culture of safety and focused the workforce on producing quality vehicles. This process included assessing the company’s planned product offerings, production plans, and certification processes, including the feasibility of meeting previously announced targets.
The company went public last year. However, based on the findings of the same board-initiated investigation that led to the resignations of Taylor and Luo, ELMS was forced to withdraw financial guidance and declare the company’s past financial statements unreliable. The compound effect of these events, along with a pending SEC investigation initiated this year, reportedly made it challenging to secure a new auditor and attract additional funding.
Yet the company continued to work aggressively on raising new sources of capital, while working closely with advisors to assess and improve its liquidity position. Ultimately, the board determined, following a comprehensive review with the assistance of the company’s outside advisors, and upon the recommendation of its management, that it is in the best interest of the company and the company’s stockholders, stakeholders, creditors and other interested parties to file for Chapter 7 relief.
“I’m very disappointed by this outcome because our ELMS team demonstrated incredible determination to get our electric vans ready to meet the critical need for clean, connected vehicles that reduce carbon emissions from ground transportation,” said McIntyre. “Unfortunately, there were too many obstacles for us to overcome in the short amount of time available to us. I could not be prouder of what our team has been able to accomplish under very challenging circumstances. This is a viable and essential technology, and I am confident that many of our talented employees will play a future role in this energy transition effort.”
“For the past several months, the ELMS board and the new ELMS leadership team have worked nonstop to address legacy financial, governance and operational matters at the company, and enormous progress was made, including towards vehicle certification” said Brian Krzanich, ELMS Board Chair and former CEO of Intel. “Therefore, it’s extremely frustrating that we must take this route, but it was the only responsible next step for our shareholders, partners, creditors and employees.”
The first vehicle from Michigan-based Electric Last Mile Solutions, the Urban Delivery, was anticipated to be the first Class 1 commercial electric vehicle on the U.S. market.