As electric vehicles become more prevalent, so do companies looking to gain a foothold in the industry. Unfortunately for Electric Last Mile Solutions, it’s proving to be a bumpy road to say the least. The company has had a number of issues with leadership and more recently, it’s stock crashed below $1 USD per share on word of a US Securities and Exchange Commission probe currently investigating its operations.
ELMS’s stock drop came recently alongside a regulatory filing that disclosed the SEC probe into the company, as reported by CNBC. According to the filing, ELMS disclosed that it learned of the SEC’s investigation on March 7, 2022:
“The Company learned that the Division of Enforcement of the Securities and Exchange Commission (the “SEC”) is conducting an investigation,” the filing states. “The Company intends to cooperate fully with the SEC investigation. At this point, the Company cannot predict the eventual scope, duration or outcome of this matter.”
Following the disclosure, Electric Last Mile Solutions stock drifted below $1 per share. Moreover, the company has announced it has withdrawn previous earnings guidance and will need to raise cash in order to get its vehicles into the market. This marks the latest of a few issues for the company, including the resignation of an ELMS chairperson and its CEO in February 2022. CEO James Taylor and Chair Jason Luo resigned quite unexpectedly due to an internal investigation that determined the two persons lied about share purchases ahead of the company going public though a special purpose acquisition company or SPAC.
Tesla continues to find success in the electric vehicle industry despite setbacks due to supplies, even getting ready to open its newest German Gigafactory for production, but groups like General Motors are still finding it difficult to find footing or success in the market. With ELMS staggering under the weight of executive issues and the SEC, it looks like there's one more group that will be unable to make competitive impact in the EV space anytime soon.