EV maker Nikola files for Chapter 11 bankruptcy

Nikola Corporation, the Phoenix-based electric vehicle (EV) manufacturer once heralded as a pioneer in zero-emission trucking, has filed for Chapter 11 bankruptcy protection. The company announced plans to liquidate its assets following prolonged financial struggles and market challenges.

Entering bankruptcy with approximately $47 million in cash, Nikola aims to sustain limited operations and compensate employees during the transition. The company intends to continue certain service and support operations for its battery-electric and hydrogen-powered trucks currently in the field, including fueling operations, through the end of March. After that, Nikola will need one or more partners to support such activities. 

Steve Girsky (CEO of Nikola) said:

"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."

Founded in 2015, Nikola aspired to revolutionize the trucking industry with zero-emission vehicles. The company went public in 2020 and began truck shipments in 2024. However, it faced significant financial losses and vehicle recalls, leading to its current predicament.

The company's downfall mirrors the challenges faced by other EV startups, such as Lordstown Motors and Fisker Automotive, which have also filed for bankruptcy amid a competitive and rapidly evolving market.

Nikola's stock experienced a sharp decline of 41% following the bankruptcy announcement, reaching an all-time low of 35 cents. Shareholders, including Antara Capital and Nomura Holdings, may not receive any distributions after the sale.

Despite efforts to raise capital and reduce liabilities, Nikola could not overcome market and macroeconomic challenges, leading to its decision to file for bankruptcy and liquidate its assets.