Nikola declared on Wednesday that it has filed for Chapter 11 bankruptcy protection, initiating plans to sell its assets in response to tepid demand, rapid cash burn, and funding challenges. This development marks the end of a tumultuous journey for the electric-vehicle maker, which faced leadership upheavals, declining share values, and short-seller allegations.
Several electric vehicle startups, including Fisker, Proterra, and Lordstown Motors, have similarly filed for bankruptcy in recent years. These companies, which debuted publicly during the pandemic with promises to transform the sector, struggled as financing for their capital-intensive operations dwindled amidst high interest rates and reduced demand.
Phoenix-based Nikola began by producing battery-powered semi-trucks and later shifted to hydrogen-powered electric trucks. Despite increasing production in 2024, the company struggled financially, losing substantial amounts on each truck due to reluctance from fleet operators to adopt amid high borrowing costs. The firm's stock dipped considerably, plummeting 38% on Wednesday, thus valuing the company at below $50 million, compared to a $27 billion peak in 2020.
Nikola's Bankruptcy: A Tumultuous Ride in the Electric Vehicle Sector
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