Electric Vehicle Charging Station Company Files for Chapter 11 Bankruptcy

Recently, a key EV infrastructure company called Charge Enterprises filed for bankruptcy in the US Bankruptcy Court. Their bankruptcy filing will be a blow to the industry in the US because Charge Enterprises is a manufacturer of EV charging stations, something the country is already in short supply of.

The bankruptcy will hand control of the business and its restructuring to a lender known as Arena Investors in a deal, awarding them 100% ownership of the company.

The company asked its creditors for feedback on its restructuring plan and hopes the bankruptcy court will approve its deal with Arena Investors by April 24, 2024. Should the deal go through, Charge Enterprises would hopefully secure their way out of debt and back to producing EV charging products.

Korr was supposed to be holding $10 million to help them pay off their debt, but when Charge Enterprises tried to access it, they were reportedly told it was unavailable.

Previously, EV producer Lordstown Motors, EV parts producer Proterra, and Electric Last Miles Solutions all filed for bankruptcy in 2022. These bankruptcies follow a struggling EV market that has failed to attract customers on a wider scale.

Another issue the company has to contend with is charges from the SEC. The SEC reported in a press release in February that the company has been charged with misleading investors about its electric pickup truck.

There are several incentive programs at the federal and state levels to provide tax credits for people wanting to buy EV vehicles, yet despite various incentives, nothing seems to be working.

Without access to charging stations, people would need to charge them at their homes. Not only is this inconvenient, but it increases the cost of their electric bill every month.

A Consumer Report study in 2023 found that electric vehicles have almost 80% more problems than gas-powered vehicles. They are also generally less reliable, meaning people are worried about EVs breaking down more often.

However, that generally more expensive upfront cost turns customers off, who would have to own an EV for several years before they start to see any financial benefits.

This is a tough decision for EV makers, who have had to invest a lot of time and money into developing them, only for sales of EVs to be lackluster.

Going forward, EV vehicle producers will need to find a way to address problems with EVs if they expect people to want to abandon gas-powered vehicles wholesale.

A report released by Car Gurus in October noted that EV inventories from retailers increased by over 500% from just the year before.

Tesla’s Model X, Y, and S saw a price drop between 34 % and 37%. Between October 2023 and 2022, the Ford F-150 Lightning’s price fell from $104,810 to $68,705.

However, data from CarGurus from October shows that new vehicle demand actually increased by 13.9% year-over-year. People are actively choosing to avoid newer EV models in favor of other newer models.

“While consumers still have plenty of concerns surrounding an EV’s battery range, price remains the higher priority when purchasing an EV,” Martinez said.

However, the price of an average EV is still 28% higher than the average gas vehicle. A 60-month loan on an EV with an 8% interest rate will cost the average EV buyer an extra $277 per month.

“Price and safety are the top two most important features across consumers who own vehicles, regardless of whether they’re all-electric, hybrids or gasoline-powered,” Martinez wrote.

“EV owners are most likely to want a front trunk and self-driving technology, but potential buyers aren’t fully convinced those features are important enough to include in their future purchase,” Martinez wrote in a Morning Consult article.

“As automakers attempt to find the most profitable strategy for providing extra features, introducing consumers to the wide range of add-ons during a lease period might be the best way to get potential buyers to later upgrade.”

A new EV buyer who is installing a home charger will pay around $2,000 for the process upfront, an extra expense on top of buying a new car.

The price of gas also tends to vary widely based on the area a person lives. For example, the average price of gas in California last week was $4.65 per gallon. In Mississippi, it was $2.86 per gallon during that same time.

This sales growth is happening in spite of challenges like economic woes driving down domestic sales of these vehicles. Over half of the EVs driving on the world’s roadways are found in China.

China is currently the top automobile seller in the world, with over 30 million units sold in 2023. Nearly 5 million of those automobile units were shipped to overseas destinations.