Michigan EV Startup Electric Last Mile May Go Bankrupt in June

Image: Electric Last Mile Solutions

Electric Last Mile Solutions said in a Friday filing that it may run out of cash in June, sooner than it previously expected, due to higher costs — reports Bloomberg.

The Troy, Michigan-based company manufactures electric trucks for last mile delivery with an overarching goal of accelerating the electrification of commercial fleets. Electric Last Mile Solutions went public last year through a $1.4 billion USD SPAC merger deal with Forum Merger III.

“The company expects that, without obtaining additional financing, it has sufficient cash to continue operations into June 2022,” the electric vehicle (EV) startup said in the filing, adding that it was “actively pursuing potential sources of liquidity” to improve its finances.

Back in March, Electric Last Mile had estimated it had sufficient cash on hand to last until anywhere between July and September. The company’s latest projections, however, reveal it has higher expenses in several areas, including employee retention and payments to suppliers.

The EV maker is currently under SEC investigation and has also fallen behind on its annual and quarterly filings. Electric Last Mile is long past the deadline to file its annual 10-K, has delayed its first-quarter 10-Q, and also needs to redo financial statements from at least two past quarters.

The company has not had an auditor since February, further worsening its compliance woes. Electric Last Mile Solutions has until May 31 to submit a detailed plan to Nasdaq for how it will catch up on all the compliance requirements for its public listing. The stock has fallen almost 90% so far this year.

The market for electric delivery vehicles is rapidly growing as more and more companies seek to transition their fleets to all-electric.

Ecommerce giant Amazon has contracted Rivian, another EV startup, to produce a total of 100,000 electric delivery vans by 2030, and General Motors-owned BrightDrop is pumping out thousands of all-electric delivery trucks for FedEx, Walmart, and others. Even Electric Last Mile said it had received more than 45,000 pre-orders for urban delivery vehicles when it went public.