U.S. bankruptcy inquiries are increasing to their greatest level since early 2020, signaling a possible surge of filings in 2025, as new tariffs and record consumer debt may drive already struggling consumers over the edge. According to a March Forbes report, business bankruptcy filings increased by over 40% between March 2023 and April 2024, impacting businesses in a wide range of industries. The effects of inflation and rising interest rates were felt by numerous big, well-known corporations.

For American companies that depend on certain goods and imports, Trump’s tariffs have increased costs, particularly on Chinese goods and other imports (such as steel and aluminum). Inflation has been exacerbated by numerous businesses passing those expenses on to customers in the form of higher prices. At a time when supply chain disruptions and robust post-pandemic demand were already driving up prices, these levies have added to the pressure. Because lower- and middle-income households are more likely to rely on credit to pay for necessities, higher costs limit their purchasing power. This ultimately raises the likelihood of delinquency and credit card usage.

By making it more costly or difficult for American manufacturers to find reasonably priced parts, tariffs have also upset global supply chains. Companies that were unable to absorb the cost increases have reduced production, raised prices, or laid off employees, all of which have an adverse effect on household stability and economic activity. Regional economies are weakened by layoffs and decreased company investment in specific industries (such as manufacturing and agriculture) which can also increase the default rates on debts such as vehicle loans and mortgages.

Total Bankruptcy Filings By Chapter — Years Ending March 31, 2021-2025

Year Chapter 7 11 12 13 2025 320,571 8,844 259 199,130 2024 271,825 8,036 155 187,539 2023 231,200 5,371 148 166,449 2022 265,071 4,333 228 125,655 2021 345,224 7,823 487 119,502

There was a +13.1% rise in bankruptcy filings over the 12-month period ending March 31, 2025, and although the rate of acceleration is comparable to that of the quarterly report released on December 31, 2024, the number of new bankruptcy cases is still far lower than it was following the Great Recession of 2007–2008.

In 2024, the Administrative Office of the U.S. Courts reported that the number of business bankruptcy filings increased by 22.1%, from 18,926 in 2023 to 23,107 by the end of 2024.

What is the Reason Behind Such a Surge?

1. The main driver is rising costs.

The majority of businesses list growing expenses due to interest rates and inflation as the main cause of their bankruptcy filings. For instance, Enviva said that historically high inflation impacted their profit margins on long-term contracts, whereas Red Lobster cited macroeconomic factors including inflation and growing salaries.

The cost of labor, energy, and raw materials increased due to inflation, which reduced company profit margins. Since many businesses had variable-rate debt, managing this debt became more expensive when interest rates rose. High interest rates and inflation put pressure on businesses from all directions, making it more difficult for them to keep their cash flow positive.

2. Long-lasting effects from COVID-19: These patterns are insignificant in comparison to 2020, when 630 businesses filed for bankruptcy and company bankruptcies reached a 10-year high. However, in many respects, the current situation is a result of the pandemic’s aftereffects—being listed as a major contributing factor in more than 79% of the big bankruptcies.

The pandemic’s lasting impact on market dynamics, however, may have been the most important contributing factor. Companies were forced to adjust to new markets as a result of the COVID-19 pandemic’s rapid acceleration of changes in consumer behavior. The speed and scope of these changes simply were too much for many big businesses to handle.

3. Competition is getting tighter: Many businesses saw a decline in profitability and market share as a result of increased industry competition. Established businesses now have to contend with more nimble rivals. Rite Aid, for example, pointed out that it must contend with online merchants such as Amazon in addition to conventional pharmacies and supermarkets.

These businesses must cut prices to draw in new clients due to increased competition, which also reduces profit margins. Companies are less equipped to handle these reduced margins when you combine that with growing expenses and high interest rates, which raises the possibility of bankruptcy.

4. Unsuccessful pivots in business: The Cornerstone Research research also emphasizes how many businesses suffered financial losses as a result of failed strategic initiatives. During the pandemic, many businesses tried to change course by launching new goods, but these attempts ultimately failed. For instance, some businesses attempted to start providing remote services without fully appreciating the financial commitment needed to implement these changes.

Many well-established businesses in the manufacturing and retail sectors struggled to innovate or change course fast enough. They were only made more vulnerable by their unwillingness to adopt new technologies or alter their business strategies. Temporary financial assistance was given by the federal government through programs like the Paycheck Protection Program. But in the end, it served as a short-term lifeline for numerous businesses that otherwise would have failed.

Total Commercial Bankruptcy Filings Rise Across U.S.

There were 733 commercial chapter 11 applications in May, an estimated 62% rise from the 453 filings in April, according to recent data from Epiq AACER. The total number of commercial filings in May was 2,695, which was 8% more than the total number of commercial filings in April 2025 (2,489). In May 2025, small business filings—which are recorded as subchapter V elections under chapter 11—rose 3% to 228 from 223 the month before.

“The sharp uptick in overall commercial chapter 11 filings in May 2025 underscores the ongoing economic pressures businesses face, from elevated borrower costs, potential tariff impacts and geopolitical uncertainty,” said Michael Hunter, VP of Epiq AACER. “Meanwhile, consumer filings continue to climb yet remain below pre-pandemic levels; however, the resumption of student loan collections and the expiration of the FHA modification programs are likely to drive further increases in filings, particularly through the end of 2025 and into 2026.”

The overall number of bankruptcy files in May was 48,218; this was a 3% drop from the 49,610 filings in April. Additionally, May’s 45,523 noncommercial submissions were 3% fewer than the 47,121 noncommercial filings in April 2025. While consumer chapter 13 filings rose 3% to 16,694 from 16,198 in April 2025, consumer chapter 7 files had a 7% decline to 28,716 from 30,823 in April 2025.

Additional Findings — National (May 2025)

From 2,664 commercial filings in May 2024 to 2,695 in May 2025, there was a minor 1% rise in total commercial filings.

In May 2025, there were 733 commercial chapter 11 filings, which was a 4% reduction from the 765 applications recorded in May 2024.

In May 2025, there were 48,218 filings for bankruptcy in the U.S., up 7% from 45,025 in May 2024.

In May 2025, there were 45,523 noncommercial bankruptcy filings, up 7% from the 42,361 noncommercial filings in May 2024.

In May 2025, 28,716 customers filed for Chapter 7, an increase of 11% from the 25,773 who did so the previous year.

From 16,507 chapter 13 filings in May 2024 to 16,694 in May 2025, there was a 1% rise.

“The current financial landscape presents struggling businesses and consumers with additional challenges of elevated prices, higher borrowing costs and uncertain geopolitical events,” said ABI Executive Director Amy Quackenboss. “Bankruptcy provides a proven process to a financial fresh start for distressed businesses and families.”

According to a survey by Cornerstone Research, roughly 113 public and private businesses with assets exceeding $100 million declared bankruptcy under Chapter 7 or Chapter 11. Additionally, in the first half of 2024, 16 “mega bankruptcies”—companies with assets exceeding $1 billion—took place. Since the Covid-19 epidemic, this is the most massive bankruptcies in a six-month period.

All industries saw a rise in these filings, although the manufacturing, services, and retail sectors were the most severely affected. Specifically, 29% of all bankruptcies were in the services sector, a sharp rise over the sector’s historical average of 17% between 2005 and 2023. Bankruptcies also increased in the real estate, insurance, and finance sectors.

With new tariffs, rising costs, more debt, and persistently high interest rates, many American households may hit a breaking point in 2025. By the end of 2024, bankruptcy filings in the U.S. had increased 14.2% year-over-year (YoY). Record debt buried consumers, and according to the Federal Reserve Bank of New York, at the end of 2024, the percentage of households that were 90+ days overdue on their auto loans and credit cards reached a 14-year high—and delinquencies are still rising. At $1.21 trillion, credit card balances reached a record high.

In today’s rapidly transforming business world, it seems the only constant is change. Companies that can’t keep up with the pace of change and adapt to disruptive innovation often find themselves floundering.

There are quite a few examples of companies that were household names until they failed to innovate and were forced to declare bankruptcy.

Eastman Kodak is one name that comes to mind, along with Polaroid Corp., Blockbuster, Inc., and Borders Group. Some of these companies might have had other problems, but not keeping up with market changes was certainly a major factor that led to their bankruptcy.

Eastman Kodak Co.

Eastman Kodak is the company that brought the phrase “Kodak moment” into popular use. The company’s cameras tended to be lower-priced than its competitors but it made more money on the film that the cameras used.

The company failed to keep up with many of the innovations brought by the digital age. As digital cameras became popular, reducing the need for photographic film and cameras, Kodak ran into financial difficulties. The company ultimately filed for bankruptcy in 2012 before reorganizing and emerging from Chapter 11 in 2013.

Ironically enough, the company’s research people came up with a digital camera as early as the 1970s, but the company did not see nor seize its potential. Or maybe management balked at the threat to its lucrative film sales.

Kodak sold off several lines of business during tough times. It has reinvented itself as a provider of hardware, software, and services to commercial printers, publishers, and the entertainment industry.

Polaroid Corp.

Polaroid is another photo industry company that came undone at the start of the digital photography era.

Before the emergence of digital cameras, Polaroid cameras were a popular means to get instant photographs. The company was seen as a representative American company with a listing in the Nifty 50.

However, as digital photography caught on in the 1990s, the company did not respond adequately.

At the same time, its client base, which included many commercial users like insurance adjusters, started going digital.

Ultimately, Polaroid filed for bankruptcy in 2001. The rights to Polaroid went through numerous hands until 2017 when it was sold to a Polish investor. Polaroid instant cameras, film, and printers are sold through the Polaroid.com site.

Blockbuster Inc.

Blockbuster once dominated the video rental business with storefronts in strip malls across the nation. But the company failed to keep up as its market transformed with the availability of digital download technology. People were able to download videos from the internet, and cable companies started offering video-on-demand.

Even before downloading videos went mainstream, Blockbuster’s competitor Netflix, Inc. (NFLX) adopted a savvy strategy, mailing videos to customers and saving them the bother of a trip to a physical store. Video vending machines also competed for business.

Caught off guard, Blockbuster ultimately filed for bankruptcy in 2010. A locally-owned storefront in Bend, Oregon, is now proclaimed to be the Last Blockbuster on Earth.

Borders Group

The online era has also brought about changes in the bookstore business, as online booksellers like Amazon (AMZN), cut into the sales of physical retail stores, and e-reading devices, such as Kindle or mobile devices, cut into sales of physical books.

The Borders Group of bookstores, which also had an entertainment section in its retail outlets, did not get ahead of this trend, while its main competitor Barnes & Noble, Inc. (BKS) was a bit savvier.

Other companies cut down on their music and DVD sections, as physical sales started getting hit by the move to online purchases by more digitally adept younger consumers.

Borders didn’t respond as fast. As a result, Borders ultimately filed for bankruptcy in 2011. All of its stores closed that year.

Why Are Some Companies Oblivious to Innovation?

Why do some companies not heed the warning signs and continue to pursue their defined way of running their business?

Vijay Govindarajan, a professor at Dartmouth’s Tuck School of Business, has studied this subject and provides some insight. For one, he believes companies that have invested heavily in their systems or equipment are hesitant to invest again in newer technologies.

Then there is the psychological aspect in which companies tend to focus on what made them successful and don’t notice when something new comes around.

There also can be strategic missteps, which may occur when companies are too focused on today’s market and don’t prepare for change or technology shifts in the marketplace.

What Are Some Big-Name Retailers that Have Disappeared Lately? A number of big-name retailers have significantly dwindled in size and impact, or live only in the memories of their customers. Pier One Imports stores were once familiar to brick-and-mortar shoppers as a source of imported home goods and decor. The brand now exists only as an online retailer. The last straw for Pier One was the Covid-19 pandemic in 2020.

Bed Bath & Beyond, a ubiquitous chain of housewares stores, shut down all of its stores in April 2023. Its name lives on since its purchase by Overstock.com, which changed its website and corporate names to reflect the takeover.

Toys ‘R Us once controlled a quarter of the world’s toy market, with some 1,500 stores. It is now getting a second life as a mini-shop in Macy’s department stores.

What Are the Biggest Bankruptcies in U.S. History? The distinction for the biggest bankruptcy in U.S. history belongs to Lehman Brother Holdings, which kicked off the 2008-2009 financial crisis by collapsing despite nearly $800 billion in assets. Most of the trouble was caused by Lehman’s investments in subprime mortgage debt, which was very popular on Wall Street until it wasn’t. Second on the list is Washington Mutual, which came up short after a run on the bank during the start of the 2008-2009 crisis despite about $328 billion in assets. That makes it the biggest bank failure and the second most costly bankruptcy in U.S. history.

Third is Silicon Valley Bank, once the darling of West Coast tech startups. which helped kick off the crisis in March 2007 after a run on the bank. About $42 billion was withdrawn in one day, leaving the bank with -$1 billion in assets,

What Happens to a Company When It Declares Bankruptcy? A declaration of bankruptcy is an admission that a business or an individual is incapable of meeting its financial responsibilities. Chapter 11 bankruptcy, the most common filing for businesses, is designed to allow for court approval of a plan by the company to get out of the mess, cut its expenses drastically, and pay off at least some of its creditors. In many cases, the company hopes to emerge from bankruptcy with a second chance. In other cases, the company is shut down and its assets are liquidated to pay off as many of its debts as possible.

The Bottom Line

Companies that don’t respond to market changes brought about by innovation, either because of a fixed mindset or because they didn’t read the market right, tend to miss out on opportunities. Companies that don’t evolve ultimately go under.

If the changes are big enough that an industry’s fundamental business model changes, these old- school companies are at risk of losing their market share and ultimately going bankrupt.

It’s hard to think of any big, important enterprise—now or ever—more reviled by investors than American Airlines. At present, its stock is languishing at around the same, super-depressed levels as when the world’s fleets sat grounded during the depths of the COVID crisis. Since peaking in early 2018, American’s shares have dropped roughly 90%, crushing its market capitalization to a puny $7.1 billion as of October 27, a figure so shrunken that this iconic name now sputters as only as America’s 478th most valuable public enterprise. Put simply, the funds and folks that drive the equity markets hold an incredibly grave view of American’s future, a take so dour that it gives new meaning to the term “diminished expectations.”

To be sure, investors are now far more pessimistic on the future for all the major airlines than before COVID lowered the hammer. Starting in March of this year, stocks of the Big Four—American, Delta, United and Southwest—staged a strong comeback, raising hopes that at long last, they’d durably break from their three year funk. The lever: A spring and summer surge in “revenge” travel swelled bookings to numbers even exceeding the excellent 2019 volumes.

The bounce proved short-lived. By July, share prices started a synchronized swoon that’s barely abated. Hardest hit in the recent downturn are American and Southwest. As of the market close on October 27, both have dropped around 38% since the start of July. Delta and United have suffered slightly lesser declines, and are still hovering more than 10% above their lows when the outbreak struck, while Southwest, hurt by outdated systems that undermined its traditional reliability, is selling even farther below its pandemic bottoms than American. For all of the Big Four, shares are now trading at 2012 to 2013 prices.

Assessing the big fall since July that killed budding comeback

Two negatives account for the sudden retreat, says Savi Syth of Raymond James. The first is the 40% June to September run-up in jet fuel, a line item that even before the jump accounted for around one-fourth of operating costs. The rise explains why stocks began dropping in the summer while traffic was still strong. That hit, says Syth, disproportionately penalizes American and Southwest somewhat versus Delta and especially compared to United. American tilts more towards the domestic market, as well as Latin America, than its two network rivals that offer more extensive service to Europe and Asia. Hence, its average flights are shorter, and the fewer miles covered, the higher the fuel expense per passenger, since such a high proportion of burn happens at takeoff. In addition, Delta and United are flying a greater mix of wide body aircraft that use less fuel per passenger. (Southwest has the greatest exposure to fuel costs since its only foreign destinations are relatively nearby places in Central America and the Caribbean.)

The second downer: softening sales going into the fall. “Last year, because of all the pent-up demand for travel, the vacation season lasted well into October,” explains Syth. “This year, it’s returned to the traditional seasonal pattern, so that we’ve seen a slowdown versus the extremely high levels at this time last year.” Delta and United are also benefiting more from global trends than American, as traffic to Europe and Asia remains robust while the U.S. fades.

For all four majors, the recent collapse in stock prices is flashing an extreme signal: Investors foresee the carriers’ earning a lot less in the years ahead than when they were selling at well above today’s levels as the recovery from the Great Financial Crisis gathered speed from 2014 to 2019, or even in June of this year.

But of the Big Four, American’s valuation is the lowest by a wide margin, meaning that investors wager that it will do far, far worse going forward than its beaten-down peers. The market caps for United ($11.1 billion) and Southwest ($13.3 billion) exceed American’s $7.1 billion by 54% and 85% respectively, and Delta’s $20 is almost three-fold bigger.

That American’s worth lags even the pummeled numbers for its rivals is especially shocking because measured in annual revenue, it’s about the same size as Delta and United in the low-$50 billion range, and collects twice the fares of Southwest. In fact, its lowly standing sits in stark contrast with its role as a centerpiece of global air travel—and even its current financial performance. The colossus of Fort Worth towers as the world’s largest carrier, measured in fleet size, daily flights, and passengers carried; last year, nearly two hundred million customers filled its seats.

Though the COVID crisis left its deepest scars on American, the airline’s rebounded sufficiently to generate well above the profit dollars needed to pay its creditors. Hence, the chance it will fall into bankruptcy, as it did in 2011, appear minimal. Indeed, following Q2 earnings, Fitch and S&P awarded American double upgrades and Moody’s raised its status one notch. All the agencies view American as motoring in recovery mode. In a note earlier this year, Fisk cited prospects for “improved profitability” and a position of “solid liquidity.”

“For all four airlines, that valuations have fallen to around the COVID period’s or even below in the cases of Southwest and American look bonkers,” says Syth. “The markets are forecasting that 2023 will represent peak earnings, and see a descent from there.” And for investors, the most ghoulish and repelling of the group, the “loser” destined to at best bump along as revenues barely exceed expenses, is American.

Given that U.S. travelers rely on the stalwart for around one-quarter of their air travel, it’s important to examine American’s current financial performance, and assess whether the odds that it will get much worse from here are really as high as the market’s dreariest of dreary judgment.

American’s twin problems: Weak cash generation, and excessive debt

Since its U.S. Airways tie-up that in 2013 created the world’s biggest carrier, American has been both the least lucrative of the four majors, and accumulated the most debt. And the combination limits its ability to reduce the big pile of borrowings. A metric called cash operating return on assets, or COROA, is an excellent yardstick for the returns American garners from marshaling its planes, gates, maintenance hubs and all other investments. COROA is the brainchild of Jack Ciesielski, one of America’s top accountants. To remove the effects of leverage and taxes, COROA starts with cash from operations and adds back interest and taxes paid in cash. That number is the numerator. The denominator is balance sheet assets plus accumulated depreciation and amortization. It represents all the capital parked in the business used to generate those cash flows. COROA displays how many dollars a company collects from all the dollars ever plowed into the business as it now exists, regardless of its debt load or tax burden.

In 2022, American achieved $3.95 billion in “operating cash flow,” pre cash interest and taxes, on $85 billion in assets, for a return of 4.7%. That’s down from $5.7 billion and 8.5% in 2017, though it’s a big improvement over the 2.7% margin of 2021. The basic issue: American kept earning less on a growing asset base. By contrast, Southwest recorded COROA of 7.6% last year, and both Delta and United hit 8.7%, almost twice American’s result and numbers exceeding those half-a-decade back.

While cash flow trickled, American borrowed heavily for two purposes, repurchasing shares and buying new planes. Following the merger, the leadership saw their newly-formed giant as extremely undervalued, and spent a staggering $12 billion on buybacks between 2014 and 2019 in anticipation that big operating improvements would drive its stock far higher. American also spent $30 billion in the same period replacing its aging roster of jets, adding over 300 of the narrow body Boeing 737-800 Max, a gambit that amassed the youngest fleet among the big four. “All the spending that was happening while American was still merging the two systems contrasted with the much more measured, conservative approach at Delta,” says Syth.

Those huge outlays imposed a mortgage on American’s future. In 2014, it owed $8.1 billion in net debt (defined as long-term borrowings plus capital leases, minus available cash). By the close of 2019, the burden had ballooned to almost $25 billion. Due to losses not covered by the huge federal aid package granted during the COVID meltdown, America’s borrowings expanded to $29 billion in Q1 of 2021. Since then, it’s wrestled the number to $25.5 billion as of this year’s September quarter. Still, American’s carrying about twice the approximately $13 billion loads at Delta and United. (Southwest has zero net debt.) American’s also paying around $1.5 billion in interest annually, including what it’s collecting on its cash horde. Once again, its overall interest bill is about twice that of its two biggest rivals.

Here’s where the intersection of sub-par earnings and heavy debt diminish American’s cushion for safety. For the first nine months of this year, its interest payments absorbed a staggering 49% of operating income.

American’s cash flows are lagging but it harbors a “doubling-down” plan for a liftoff

A major reason American’s operating margins trailed “around 3 points below Delta’s and United’s,” explains Syth, is a hangover from the U.S. Airways union. “The merger involved dis-synergies,” she says. “It didn’t result in cost improvements. American had to raise the legacy U.S. costs to the higher level of its own base, which were already elevated.” In addition, American booked big losses on flights to Asia from both L.A. and Chicago, where it faced intense pricing pressure from Delta and United, both of which have much larger footprints in the region.

But starting around 2018, American launched a promising new strategy to concentrate capacity in the three hubs where it holds the dominant positions, Dallas-Fort Worth, Charlotte, Miami and Washington-Reagan. These sunbelt hubs serve cities that all rank among the nation’s top metros for job and population growth. “It’s a strategy based on the Delta model in Atlanta where the more business you can create in the same factory, the more money you’ll make,” says Syth. “We were excited about the approach, and it appeared to be working.” Then, the pandemic struck, forcing American to put the “doubling-down” game plan on hold, and keep piling on debt.

Now, American’s resumed its push to expand where it’s most powerful and best protected. “They’re getting more gates in DFW and Charlotte,” says Syth. “They’re also growing in Phoenix, [where it holds a 35% share, tied for tops with Southwest]. Phoenix proved a great destination market for them in the pandemic, and is their west coast connecting hub.” American wisely formed alliances where it’s weak, notably a partnership with Alaska Airlines in the Northwest; Alaska funnels passengers from the west coast and Pacific Northwest into Seattle, where they board American flights to such domestic hubs as Dallas and Charlotte. (In May, a federal judge issued an order to terminate a successful, three-year-old code-sharing venture linking American and JetBlue, as part of the Justice Department’s suit to block the proposed JetBlue-Spirit merger. The partners dissolved the alliance in July.)

The tiny expectations may point to more trouble than will happen

It’s illuminating to put numbers on the market’s dim view of American. Let’s assume that since it’s a risky play, investors would want a 10% return, meaning 8% “real” gains plus 2% inflation. The 8% figure equates to an extremely modest PE of around 13. So by awarding the meek current valuation of $7.1 billion, investors are expecting American to generate future net earnings of roughly $500 million a year, (the $7.1 billion cap divided by 13), a “no growth” number that would simply rise with inflation. In effect, the money crowd’s projecting that American will keep teetering on a narrow edge, making too little to pay down debt, and risking a fall into default if times turn tough.

But today, American’s making a lot more than that poor scenario envisages. Syth predicts that the carrier will earn $1.6 billion this year—it’s already exceeding that pace through the first three quarters—dipping next year, but rising to $2.1 billion in 2025. Keep in mind that those amounts come after covering interest expense.

The big danger: The onset of a recession that slashes demand and lowers revenues. American remains the most vulnerable of the big four due to the large portion of its cash flows going to interest. But it appears that if American simply maintains the current course, it can survive anything except maybe an extremely severe, long-lasting downturn. “In a recession, you have two risks,” says Syth. “Cash flow dries up and your spending requirements stay high. So you need to raise high cost debt or equity, which either makes the debt burden even more crushing, or pounds the stock price through huge dilution.” Or, the airline’s in such bad shape that it can’t raise emergency financing and files for bankruptcy.

Neither outcome appears likely for American reckons Syth, and this writer agrees. Because its fleet is so new, American’s Capex future requirements are modest by industry standards. It also holds a substantial cash trove of $11.5 billion. “I don’t see their having to raise new capital in a normal downturn, and downturns aren’t forever. They usually last a shorter time than did the pandemic,” says Syth.

The best reason, perhaps, that American should persevere: It boasts the top market share in hundreds of routes where it faces limited competition. The current airline model where a four main players divide the market and practice “disciplined” competition should be its ticket not just survival but at least profitability that keeps the carrier out of harms way.

Earlier this month we covered the bizarre story of the sudden death of an e-bike rental company. The shared mobility brand Bolt Mobility apparently shuttered operations overnight, leaving thousands of e-bikes and e-scooters abandoned in cities across the US.

The move was all the more puzzling as these vehicles likely totaled hundreds of thousands of dollars’ worth of equipment, if not into the millions.

It began with five US cities that reported an overnight exit from Bolt Mobility, leaving the deserted e-bikes and e-scooters in its wake.

Because the shared mobility vehicles are locked until a user pays to unlock them via Bolt’s smartphone application, they became essentially useless in their abandoned state.

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The personal EVs may have been abandoned by Bolt Mobility, but its original manufacturer wasn’t about to let them go to waste that easily.

It turns out they were produced by Element LEV, a company that manufactures multiple models of electric bikes, e-scooters, and e-mopeds for shared mobility companies. And the manufacturer didn’t want to see the vehicles relied upon by so many commuters end up going to waste. So it sprung into action.

We spoke to Element LEV to learn more about what the company was doing to try to help the cities suddenly stuck with hundreds of locked e-bikes sitting on its streets.

Element LEV’s VP of strategic partnerships Pete Ballard explained to Electrek that the company was working to reach out to each city to help unlock the bikes with the goal of relaunching them. However, the process isn’t as easy as it sounds, since Element LEV doesn’t have a direct relationship with the cities. It was merely the manufacturer selected by Bolt Mobility, and it is now left trying to help clean up Bolt’s mess.

As Ballard explained:

As the manufacturer of the e-bikes deployed by Bolt, we hate to see products abandoned and cities and universities left without a functioning shared mobility system. We felt compelled to help and have been in contact with multiple partners across the US. Our team is jumping in to unlock those devices and working hand in hand with these markets to relaunch a healthy system.

He continued by explaining that the primary goal is to first secure the e-bikes.

That is likely a tricky task as the nature of shared electric bikes means that they are designed to freely float around cities, often being parked on sidewalks and in other public spaces without being physically locked like a typical privately owned bike.

Step one is helping to make sure the assets are secure so we are here to talk to any location that needs help.

After securing the e-bikes, Ballard explained that the company is trying to ensure that cities have access to the parts and support to manage the bikes. The ultimate goal is to help the cities bring the e-bikes back into operation.

Step two is making sure these bikes have the right spare parts to safely operate and we are providing that support too. Lastly, we want to help them navigate bringing their systems back to life, especially at a time when communities rely on shared mobility devices in their daily lives.

Electrek’s Take

When I first reported on this bizarre turn of events, I was worried that these abandoned e-bikes were going to either turn into a free-for-all or become a pile of e-waste to be discarded.

I’m thrilled to see that the original manufacturer of the e-bikes is proactively trying to help cities solve this problem in a way that actually returns the e-bikes to use instead of just cleaning up after Bolt Mobility’s mess.