Electric Last Mile Solutions (ELMS) on Dec. 11 2020, announced it was going to list on the Nasdaq through a merger with a special purpose acquisition company.
“The demand for cost effective solutions to support the e-commerce ecosystem is overwhelming,” James Taylor, the commercial electric vehicle maker’s then-CEO, said at the time. “This industry promises rewards to first movers who can deliver value-driven solutions.”
‘Very Disappointed by This Outcome’
ELMS did go public in late June 2021 and the Troy, Mich., company’s management team rang the opening bell at the Nasdaq on July 12 of that year.
The company, which described itself as “a pioneer of electric and intelligent mobility solutions for commercial vehicle customers,” said on Dec 1 that it had “a firm purchase order” from the Los Angeles-based company Zeeba vans for 50 ELMS Urban Delivery vans with the intent to purchase hundreds more in 2022.
Electric Last Mile Solutions on Dec. 29 said it would host an exhibit at the Consumer Electronics Show to display both of of its all-electric commercial vehicles: the Class 1 Urban Delivery and Class 3 Urban Utility.
But the promised rewards that Taylor spoke about never materialized and on June 12 the company said it planned to file for Chapter 7 bankruptcy.
“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,” Shauna McIntyre, interim CEO and president, said in a statement.
“Unfortunately,” she added, “there were too many obstacles for us to overcome in the short amount of time available to us.”
One Less Competitor
The Chapter 7 bankruptcy will allow the company to liquidate its assets and result in one less competitor for Tesla (TSLA) – Get Tesla Inc. Report, Ford (F) – Get Ford Motor Company Report, Rivian (RIVN) – Get Rivian Automotive Inc. Report and others in the ever-growing electric vehicle space.
McIntyre, a board member and former president of digital lidar sensor maker Ouster Automotive (OUST) – Get Ouster Inc. Report, was named to the top position in February, after Taylor, and Jason Luo, the company’s founder and former executive chairman, resigned.
The resignations followed an investigation by the company’s board that found the company’s past financial statements were unreliable and would have to be restated.
The investigation found that, prior to the SPAC merger, “certain executives” purchased equity in the company at substantial discounts to market value without obtaining an independent valuation.
Taylor purchased equity in these transactions, the company said, and Luo “participated in these and other transactions and directly or indirectly purchased and sold equity in such transactions.”
‘Charting a Clear Path’
McIntyre began her career at Ford and serves on the board of Lithia Motors.
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When she was brought on board at ELMS, Brian Krzanich, board chairman and former Intel (INTC) – Get Intel Corporation Report CEO said “the board is confident Shauna will ensure a smooth transition, effectively manage the business, and help chart a path forward.”
Not everybody was so confident.
Short-seller Fuzzy Panda Research said in a report at that time of the resignations that “unfortunately for new management and ELMS investors, based on our extensive research into ELMS we think this is just the tip of the iceberg.”
Fuzzy Panda charged that “import Records show ELMS is importing fully assembled Chinese vehicles and trying to pass them off as ‘Made in the USA.'”
“We’ve spoken with multiple of ELMS customers who ‘piloted’ the ELMS Urban Delivery Vehicle for FREE,” the short-seller said. “They all decided to RETURN the vehicles without placing an order.”
Customer reviews concluded that the company’s vehicle was “an overpriced golf cart,” Fuzzy Panda said.
‘An EV Pretender’
“ELMS is an EV pretender formed just 1 month before it announced going public,” the firm said. “The company has no competitive advantage, no technological advantage, and is running low on cash.”
The report said that ELMS’ background “lies in the remains of a different failed Chinese EV start-up known as SERES/SF Motors.”
“Formers employees told us that in 2020 the parent company was intending to take a large write-down on the factory’s asset value,” the report said, noting that Taylor was the SERES co-CEO in mid-2020.
“ELMS is yet another Workhorse-connected casualty founded by another former Workhorse CEO,” the report said.
Taylor did not immediately respond to a request for comment.
Krzanich said in the bankruptcy announcement that “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”
“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,” he said.
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