Nikola Corporation, a prominent electric vehicle (EV) manufacturer based in Phoenix, Arizona, has filed for Chapter 11 bankruptcy protection. The company announced its decision on Wednesday (February 19) after struggling to secure a buyer or additional capital. Nikola plans to pursue an auction and sale process for its assets as it faces ongoing financial difficulties.
Nikola's bankruptcy filing marks a significant downturn for a company that was once valued at $30 billion and had a multibillion-dollar deal with General Motors. The company's fortunes began to decline following fraud allegations against its founder, Trevor Milton, in 2020. Milton resigned and was later convicted of securities fraud and wire fraud in 2022, leading to the collapse of the GM deal and a steady decline in Nikola's stock price.
Despite these challenges, Nikola has made strides in the EV industry, bringing electric and hydrogen fuel cell trucks to market. The company has accumulated approximately 3.3 million fleet miles across its truck platforms and dispensed over 330 metric tons of hydrogen through its HYLA fueling network. However, production volumes remained low, with only 600 vehicles manufactured since 2022, and costly recalls further strained finances.
Nikola plans to continue limited operations, including service and support for trucks and some HYLA fueling operations, through March 2025. The company has approximately $47 million in cash to fund these activities and the sale process. Nikola's CEO, Steve Girsky, stated, "Chapter 11 represents the best possible path forward under the circumstances for the company and its stakeholders."
The bankruptcy filing raises questions about the future of Nikola's technology and operations. The company intends to market and sell all or a portion of its assets, with potential buyers including strategic and financial investors. The outcome of the sale process will determine whether Nikola's electric and hydrogen fuel cell truck technology will continue to develop.