Electric-truck maker Nikola files for Chapter 11 bankruptcy protection

Nikola said Wednesday it had filed for Chapter 11 bankruptcy protection and would pursue a sale of all or most of its assets, after grappling with rapid cash burn and struggling to raise funds in the past few quarters.

The development brings to a close a challenging journey that included numerous leadership changes, choppy sales and a plummeting share value.

EV firms that went public during the pandemic, promising to revolutionize the sector, such as Fisker, Proterra and Lordstown Motors have filed for bankruptcy in recent years as funding for the capital-intensive operations dried up due to high interest rates and flagging demand.

Nikola said it decided to initiate a sale process of its assets to maximize value and ensure an orderly wind down.

The firm will continue some operations for trucks in field and some hydrogen-fueling operations through the end of March.

The company listed assets of between $500 million and $1 billion, and estimated its liabilities were between $1 billion and $10 billion, according to a court filing.

Phoenix, Arizona-based Nikola was founded more than a decade ago. It went public in June 2020 and delivered its first vehicle in the December of the following year.

In October 2022, a New York jury convicted Nikola founder Trevor Milton on federal charges of securities fraud and wire fraud. Prosecutors in the US Attorney’s Office in the Southern District of New York had accused Milton of making false and misleading statements about “nearly all aspects of the business” as it pertained to developing electric and hydrogen-powered trucks, as well as defrauding the public through social media and podcast interviews.

The case revolved, in part, around the Nikola One, a prototype of a hydrogen-powered semi-truck. According to prosecutors, Milton claimed the vehicle “fully functions and works, which is really incredible” even though it was missing important parts and systems, including motors and a control system.

In 2018, Milton posted a video on X that showed the truck seemingly cruise down a flat road. But it was all smoke and mirrors, prosecutors say. “In fact, to film these clips, the Nikola One was towed to the top of a hill, at which point the ‘driver’ released the brakes, and the truck rolled down the hill until being brought to a stop in front of the stop sign,” the Department of Justice wrote in the release Monday.

Milton was sentenced in 2023 to four years in prison for lying to investors about the company’s hydrogen and electric truck technology.

Industry veteran Stephen Girsky, who was an analyst at Morgan Stanley and an executive at General Motors, took over as the company’s chief executive officer in August 2023. He was then the company’s fourth CEO in as many years.

It was through his special purpose acquisition company, VectoIQ Acquisition Corp, that he took Nikola public.

Nikola ramped up production of its hydrogen-powered fuel-cell electric trucks in 2024. But the company struggled to raise funding and its cash balance dwindled as it continued to lose hundreds of thousands of dollars for every vehicle sold.

Fleet operators have been hesitant to spend on setting up charging stations and inducting electric trucks, as high interest rates pinched budgets, hurting companies such as Nikola.