Phoenix-based electric and hydrogen truck maker Nikola has officially filed for Chapter 11 bankruptcy, marking a dramatic fall for the once-promising company. This news follows recent reports of the automaker’s dwindling finances and underscores the challenges facing the electric vehicle industry.
Founded in 2014, Nikola initially aimed to revolutionize both the consumer and commercial EV markets. In 2020, the company unveiled the Badger, an electric pickup truck with the option for a hydrogen fuel-cell powertrain, attracting significant attention and even a partnership with General Motors.
However, Nikola’s trajectory took a sharp turn after fraud allegations surfaced against its then-CEO, Trevor Milton, who was subsequently found guilty in 2022. The company parted ways with Milton, scrapped the Badger project, and refocused solely on commercial trucks. While Nikola delivered its first electric semi-trucks in 2022, it struggled to achieve profitability.
Financial troubles mounted, with reports late last year revealing the company held just $200 million in cash against $270 million in long-term debt. Earlier this month, rumors of impending bankruptcy sent Nikola’s stock price plummeting below $1.
The official bankruptcy filing confirms the company’s precarious financial position, stating it has only $47 million in cash remaining. Nikola plans to provide “limited” support for its existing trucks on the road. Court documents reveal the company’s liabilities range between $1 billion and $10 billion, with thousands of creditors awaiting repayment.
Nikola’s collapse makes it the latest high-profile EV startup to succumb to financial pressures. It joins a growing list that includes Lordstown Motors, another electric pickup truck maker that filed for bankruptcy in 2023, and Fisker, the California-based startup led by Henrik Fisker, which went under a year later. Even British startup Arrival, focused on electric vans and buses, ultimately sold its assets to Canoo, which itself recently filed for bankruptcy protection.
While some EV startups remain in operation, their stock prices have plummeted, and their paths to profitability remain uncertain, highlighting the volatile and competitive landscape of the electric vehicle market.
“With the dedication of our employees and support from our partners, Nikola has taken significant steps to move zero-emissions transportation forward, including bringing the first commercially available Class 8 hydrogen fuel cell electric trucks to market in North America and developing the HYLA hydrogen refueling highway, connecting Northern California to Southern California,” said Steve Girsky, President and CEO of Nikola.
“Our customers have accumulated approximately 3.3 million fleet miles across both our FCEV and BEV truck platforms and our HYLA fueling network has dispensed well over 330 metric tons of hydrogen. Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate. In recent months, we have taken numerous actions to raise capital, reduce our liabilities, clean up our balance sheet and preserve cash to sustain our operations. Unfortunately, our very best efforts have not been enough to overcome these significant challenges, and the Board has determined that Chapter 11 represents the best possible path forward under the circumstances for the Company and its stakeholders.”
