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The Trump administration has frozen federal grants for everything from battery factories to electric school buses and issued executive orders that have halted federal approvals for wind and solar projects. The freeze has not come a minute too soon as “clean” energy companies funded by Obama and Biden administration grants are dying on the vine. The latest is Canadian electric bus company Lion Electric, which was given almost $160 million to manufacture battery-powered buses for school districts. Recently, Lion initiated bankruptcy proceedings, laid off all employees tasked with building its buses, and paused manufacturing operations. Another recent example is the Ivanpah solar plant in California, which closed after operating for ten years. Obama’s Department of Energy (DOE) provided a $1.6 billion loan guarantee, and his Treasury Department provided a $535 million grant to Ivanpah. The loan guarantee and grant were on top of the investment tax credit, the accelerated depreciation (an assumed plant life of five years), and a depreciation bonus of 50 percent in the first year.

In Illinois, Senator Dick Durbin is worried that the Trump administration will cut funding to the “Solar for All” program, locking the state out of more than $100 million for solar energy projects. To replace the state’s coal generation, about 670 square miles of expensive and unreliable solar panels would be needed on almost 500,000 acres of productive farmland. So, rather than grow crops the world needs, the state would use the land for solar panels that mainly come from China, which produces them and the polysilicon they need with cheap coal-powered electricity. China continues to add coal plants every week while Biden regulations no longer allow them to be built in the United States unless equipped with unproven and expensive carbon capture and sequestration technology.

One of the most notorious solar company failures was Obama-backed Solyndra. The Obama administration backed solar panel maker Solyndra with a $535 million taxpayer-guaranteed loan from the DOE in September 2009. The funding was allocated as part of a $787 billion stimulus package. Obama’s DOE backed the company because a number of major Obama fundraisers had substantial investments in the firm despite concerns raised within his administration about the company’s viability. The plant was visited numerous times by Obama administration luminaries, including Obama himself, yet in 2011, Solyndra filed for bankruptcy.

Unfortunately, these “green” energy companies, because they depend on government funding, often fail even after winning lucrative government contracts. That is because the federal government does not have a good track record at picking winners over losers, which the market should do through private investment funding.

Electric Buses

According to the World Resources Institute, 67 percent of the planned electric school buses in the United States have been funded by the federal government through EPA’s Clean School Bus Program created by the 2021 infrastructure bill, funding over 8,000 electric buses in 49 states, four U.S. territories, Washington DC, and 55 Tribal school districts. EPA has spent $5 billion over five years underwriting electric buses for schools that could not afford them otherwise. The funding requires low-income and rural school districts, school districts in areas most affected by air pollution, and other environmental justice factors to be prioritized in allotting the funds while also requiring them to scrap older diesel buses to qualify. Priority districts are eligible for funding up to the full cost of 25 buses and the necessary chargers. A year ago, the EPA had spent $1.84 billion from the fund on 5,103 electric buses, which averaged to more than $360,000 per bus — 3 to 6 times more than diesel buses that cost between $65,000 and $100,000 each and which can use existing infrastructure for refueling.

Lion Electric, whose loan is part of the Clean School Bus funding, is on the hook to deliver $95 million worth of electric buses to 55 districts nationwide. Since 2020, Lion reported net losses totaling $301.6 million. Last year, Lion also received a letter from the Securities and Exchange Commission for misreporting several key figures in its financial disclosures. In March 2024, a group of investors filed a class action suit against Lion, alleging the company withheld the truth about supply chain problems it faced and misled investors with “grossly unrealistic financial projections.” Lion was also getting funds from EPA’s $3 billion clean port program.

In December, Lion filed for bankruptcy protection in Canada, initiated bankruptcy proceedings in Illinois federal court, and weeks after that, laid off all its employees, excluding 150 tasked with customer service and maintenance duties. Lion also halted production at its 900,000-square-foot manufacturing facility in Joliet, Illinois, which opened less than 18 months earlier.

Lion is not the only electric bus company to fail. In August 2023, Proterra filed for bankruptcy protection. Proterra was a favorite of Biden, Vice President Harris, and Secretaries Buttigieg and Granholm. Harris praised the Proterra’s electric buses, calling them “very user-friendly” and marveling at how quietly the brakes work. President Biden also praised Proterra’s products, and his administration has featured the green energy company at events. DOE Secretary Granholm had financial positions in Proterra, on whose board she used to sit, and maintained them when she assumed her post as DOE Secretary and began to direct policies that could have favored her own financial interests. Granholm eventually closed her position in the firm late in May 2021, after the House Oversight Committee opened an investigation into the apparent conflict of interest earlier that month.

The Proterra bankruptcy filing came weeks after Lordstown Motors — a company building electric pickup trucks — filed for bankruptcy protection and put itself up for sale. Other failed EV startups include Electric Last Mile Solutions and bus manufacturer Arrival, which both declared insolvency. Fisker Automotive went bankrupt twice. Its first EV venture went bankrupt in 2013, following problems with a battery supplier and losing 300 of the company’s $100,000 plug-in hybrid Karmas in a hurricane. Its second bankruptcy filing was on June 17, 2024, after months of cash spent rapidly trying to deliver its Ocean SUVs to U.S. and European customers and after it failed efforts to secure investments, including from Nissan.

Conclusion

“Clean or green” energy requires massive federal loan guarantees, and much of the funding has proven to be lost as company after company has filed for bankruptcy protection. The massive loans, particularly for electric school and transit buses, have resulted in poor equipment, much of which cannot be repaired due to company failure and bankruptcy. Range, reliability, and expenses of EV buses have turned out to be much different than advertised, idling many of them even as they transport passengers. EV buses also cost multiple times more than their diesel counterparts, and their performance is marred by expensive and frequent repairs, charging equipment costs, and much lower range than existing buses — factors that the market would quickly flesh out had it the ability to function.

*This article was adapted from content originally published by the Institute for Energy Research.