Nikola, the startup that sought to build fleets of electric heavy-duty trucks, has filed for bankruptcy and plans to shut down.
The company, which filed for Chapter 11 bankruptcy Wednesday, expects to sell all or most of its assets in order to maximize value for shareholders and ensure an “orderly wind down of its businesses,” a release announcing the filing said. Nikola was founded in 2015 and went public in 2020, one year before selling its first electric vehicle.
Although investors with an eye on Tesla’s success initially showed enthusiasm for the Phoenix-based startup, stock prices soon began to plunge as doubts emerged about the viability of the company’s technology.
Nikola's troubles worsened when its founder, Trevor Milton, was convicted on fraud charges in October 2022 stemming from false and misleading statements he made about the development of electric and hydrogen-powered trucks. Prosecutors said Milton created a misleading video of a hydrogen-powered semi truck prototype cruising along a flat road. To film the video, prosecutors said, the truck was towed to the top of a hill and released to imitate the appearance of driving.
The company said it has roughly $47 million in cash on hand as it enters the bankruptcy process and plans to use a portion of the funds to continue certain direct-to-consumer sales and support operations for trucks currently in the field.
Nikola manufactured both hydrogen-electric and battery-electric semi trucks, and its fueling network has dispensed more than 330 metric tons of hydrogen, said Chief Executive Steve Girsky.
“Nikola has taken significant steps to move zero-emissions transportation forward,” Girsky said in a statement. “Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate.”
Girsky took over as Nikola’s chief executive in August 2023, becoming the company’s fourth leader in four years.
According to the company's most recent quarterly report, the company shipped 90,000 vehicles in the three months that ended Sept. 30 last year and posted a net loss of nearly $200 million during that period. That marked an improvement over the more than $425-million net loss the company registered in the same period the year prior. Over the past year, investors have bailed on the company, sending its share price tumbling from a high of $31.20 in late March to well under a dollar this week.
In a bankruptcy filing, the company listed liabilities of between $1 billion and $10 billion and reported assets of $500 million to $1 billion. The filing said the company owes money to between 1,000 and 5,000 creditors.