Electric vehicle company Nikola filed for bankruptcy today and is selling its assets, seemingly ending a turbulent history that has included many ups and downs, ill-considered squandering of billions of dollars in investments, fraud charges, and the jailing of its first CEO and founder.
Image source: Nikola Motors
Nikola estimates its liabilities in a broad range of $1 billion to $10 billion. The company currently has assets worth between $500 million and $1 billion. Pending the court’s decision, Nikola plans to hold an auction. The company said it has $47 million to fund the bankruptcy process and sell its assets.
«Like other companies in the electric vehicle industry, we have faced a variety of market and macroeconomic factors that have impacted our ability to operate,” said Steve Girsky, Nikola President and CEO. “In recent months, we have taken numerous actions to raise capital, reduce our liabilities, clean up our balance sheet, and preserve cash to support our operations. Unfortunately, our best efforts have not been sufficient to overcome these significant challenges.”
Since 2015, Nikola has successfully exploited the idea of creating zero-emission heavy-duty vehicles using hydrogen fuel cell technology. This helped the company attract significant investment. Later, electric trucks came into its sphere of interest. In 2020, General Motors announced plans to jointly design and manufacture electric trucks with Nikola in exchange for an 11% stake in the startup.
But less than a week later, Hindenburg Research published a bombshell report accusing Nikola of fraud. The video showed a Nikola truck rolling downhill, giving the false impression that it was moving under its own power. The report set off a chain reaction that led to founder Trevor Milton stepping down as chairman and CEO, and then to his arrest. In the wake of the scandal, General Motors pulled out of its partnership with Nikola.
Milton was also convicted of making false claims about producing his own hydrogen fuel at below-market prices and claiming the company had received “billions and billions and billions and billions” of dollars in truck orders. He was sentenced to four years in prison.
Nikola went public in 2020 and began shipping its first trucks less than a year later. It ramped up production in 2024, but was losing hundreds of thousands of dollars on every truck it sold. As of the third quarter of last year, the company had produced just 600 vehicles, many of which were recalled for defects, costing the automaker tens of millions of dollars.
Nikola is the latest high-profile electric vehicle company to go bankrupt after failing to live up to lofty expectations. Others include Lordstown, Proterra, and Fisker. Chinese self-driving truck maker TuSimple avoided bankruptcy by pivoting to gaming technology.