Electric-truck maker Nikola has filed for Chapter 11 bankruptcy protection and will pursue a sale of its assets, the company said on Wednesday, marking the latest collapse of an EV startup grappling with funding challenges and weak demand.
“Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate,” said Nikola CEO Steve Girsky. “Unfortunately, our very best efforts have not been enough to overcome these significant challenges.”
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Nikolaās bankruptcy follows similar filings by EV startups Fisker, Proterra, and Lordstown Motors, which struggled to sustain operations as high interest rates and slowing demand cut off access to capital. The company, which began producing battery-powered trucks before shifting focus to hydrogen-powered vehicles, said the move aims to “maximize value and ensure an orderly wind down.”
The Phoenix-based firm said it would maintain limited support for its trucks in operation and some hydrogen fueling activities until the end of March. Nikola, which delivered its first vehicle in December 2021, faced a series of challenges, including a recall of all its trucks in 2023 following multiple fire incidents. While it ramped up hydrogen truck production in 2024, it continued to incur significant losses on each sale, as fleet operators remained hesitant amid high borrowing costs.
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Nikola’s stock plummeted about 38% on Wednesday, leaving it with a market valuation of less than $50 millionādown sharply from its peak of about $27 billion in 2020, when it was briefly valued higher than Ford Motor. The company enters Chapter 11 with $47 million in cash, down from $198.3 million in September and $464.7 million at the end of 2023.
“The struggles they have faced, plus increasing competition, operational challenges, and high costs for the EV industry as a wholeāall of that came together,” said Sarah Foss, head of legal at credit and restructuring analysis firm Debtwire.
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Nikola listed assets between $500 million and $1 billion and estimated its liabilities between $1 billion and $10 billion, according to a filing with the U.S. bankruptcy court in Delaware. The company previously resorted to a reverse stock split to maintain its Nasdaq listing as shares repeatedly fell below the $1 threshold.
Nikola’s troubles began shortly after its public debut in 2020 via a blank-check merger, when short-seller Hindenburg Research accused the company of fraud. The firm denied the allegations, but its founder and then-CEO Trevor Milton was convicted of fraud in 2022 and sentenced to four years in prison.
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The companyās bankruptcy underscores the challenges facing EV startups that sought to disrupt the industry during the pandemic-era boom but have since struggled to navigate a changing financial landscape.