Struggling electrical truck firm Nikola stated it was submitting for Chapter 11 chapter safety on Wednesday and would unload its belongings, successfully ending a difficult journey punctuated by fast money burn, allegations of fraud, and the incarceration of its first CEO and founder.
Nikola stated it will search an public sale and sale course of, pending courtroom approval. The firm stated it had $47 million in money available to fund its chapter proceedings, implement the sale course of, and exit Chapter 11. Nikola listed belongings of between $500 million and $1 billion, and estimated its liabilities have been between $1 billion and $10 billion, Reuters stated citing a courtroom submitting.
“Like different firms within the electrical car business, we now have confronted numerous market and macroeconomic components which have impacted our capability to function,” Steve Girsky, President and CEO of Nikola, stated in an announcement. “In latest months, we now have taken quite a few actions to boost capital, cut back our liabilities, clear up our steadiness sheet and protect money to maintain our operations. Unfortunately, our absolute best efforts haven’t been sufficient to beat these important challenges, and the Board has decided that Chapter 11 represents the very best path ahead underneath the circumstances for the Company and its stakeholders.”
“Like different firms within the electrical car business, we now have confronted numerous market and macroeconomic components which have impacted our capability to function.”
The submitting represents a fall from grace for the as soon as buzzy firm that aimed to rework the polluting heavy-truck business into one primarily based on zero emissions. Founded in 2015, Nikola pitched the concept of zero-emission huge rigs utilizing hydrogen gasoline cell expertise, and later stated it will embody battery-electric vehicles as nicely. The firm scored an enormous win in 2020 when General Motors introduced plans to would assist Nikola engineer and manufacture its battery-electric and hydrogen gasoline cell automobiles, together with the Badger pickup truck. In change, GM would purchase an 11 % fairness stake within the startup.
But lower than per week later, short-selling agency Hindenburg Research revealed a bombshell report accusing Nikola of fraud, together with the video exhibiting the truck rolling down a hill to simulate driving. The report set off a series response that resulted in founder Trevor Milton’s stepping down as board chair and CEO and his eventual arrest. Later, GM backed out of the fairness deal.
In addition to staging the video, Milton was accused of falsely claiming to supply his personal hydrogen fuels at below-market charges and acquiring “billions and billions and billions and billions” of {dollars}’ price of dedicated truck orders. He was sentenced to 4 years in jail.
Nikola went public in 2020, and began delivery its first vehicles lower than a yr later. It ramped up manufacturing in 2024, however was dropping a whole bunch of hundreds of {dollars} on each truck it offered. As of the third quarter of final yr, the corporate had solely produced 600 automobiles, lots of which have been recalled resulting from defects, costing the automaker tens of tens of millions of {dollars}.
Nikola was the most recent high-profile EV firm to go stomach after failing to satisfy excessive expectations. Other EV startups that failed embody Lordstown, Proterra, and Fisker. TuSimple, a self-driving truck firm from China, pivoted to gaming tech.
