Stocks indices are mixed in today’s session, though the electric vehicle (EV) sector is seeing headwinds build today. Prominent electric bus manufacturer Proterra (NASDAQ:PTRA) has officially filed for bankruptcy. At the time of writing, PTRA stock is hovering around 6 cents per share but has been suspended by the Nasdaq. It will likely end up worthless, as it appears investor sentiment for this specific pocket of the market is deteriorating.
There are many reasons why some investors may be concerned about this filing. For one, Proterra received significant funding from the federal government, and each year the overall sector receives billions. Thus, it’s unclear whether taxpayers will be made whole as a result of this whole debacle.
There’s also the fact that Proterra brought in more than $300 million in revenue and had numerous contracts with transit agencies across the country. Therefore, this could signal a shift in this space. If Proterra, among the leaders in the EV buses category can’t make it, who can?
Let’s dive into what investors may want to make of this news as it pertains to the rest of the EV sector today.
PTRA Stock Suspended. What’s Next?
With PTRA stock suspended, it’s party over for investors. In many ways, the writing has been on the wall for Proterra for some time. Now, investors will likely turn their attention to other EV makers in various categories.
Of course, government funding for rebates and U.S.-based production incentives are likely to remain, so long as President Joe Biden retains power. His Infrastructure Act provided a wide range of funding to various sectors, and those funds will continue to be allocated over time as the country looks to build out its much-needed infrastructure.
Some are calling Proterra the so-called “canary in the coal mine,” with respect to other government-financed EV projects failing. That said, the fact that one key player has been removed from the fray should bode well for the remaining companies. From here, I’d say it’s a tossup with respect to how the rest of the EV buses segment will perform.
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On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
