Struggling electrical truck firm Nikola mentioned it was submitting for Chapter 11 chapter safety on Wednesday and would dump 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 mentioned it will search an public sale and sale course of, pending courtroom approval. The corporate mentioned it had $47 million in money readily 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 said citing a court filing.
“Like different firms within the electrical automobile business, we’ve confronted varied market and macroeconomic components which have impacted our capacity to function,” Steve Girsky, President and CEO of Nikola, said in a statement. “In latest months, we’ve taken quite a few actions to boost capital, cut back our liabilities, clear up our stability sheet and protect money to maintain our operations. Sadly, our highest 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 Firm and its stakeholders.”
“Like different firms within the electrical automobile business, we’ve confronted varied market and macroeconomic components which have impacted our capacity 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 based mostly on zero emissions. Based in 2015, Nikola pitched the concept of zero-emission large rigs utilizing hydrogen gasoline cell know-how, and later mentioned it will embody battery-electric vans as properly. The corporate scored an enormous win in 2020 when Common Motors introduced plans to would assist Nikola engineer and manufacture its battery-electric and hydrogen gasoline cell autos, together with the Badger pickup truck. In change, GM would purchase an 11 p.c fairness stake within the startup.
However lower than every week later, short-selling agency Hindenburg Analysis printed 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.
Along with staging the video, Milton was accused of falsely claiming to provide his personal hydrogen fuels at below-market charges and acquiring “billions and billions and billions and billions” of {dollars}’ value of dedicated truck orders. He was sentenced to 4 years in jail.
Nikola went public in 2020, and began delivery its first vans lower than a yr later. It ramped up manufacturing in 2024, however was shedding a whole lot of 1000’s of {dollars} on each truck it bought. As of the third quarter of final yr, the corporate had solely produced 600 autos, lots of which have been recalled as a result of defects, costing the automaker tens of tens of millions of {dollars}.
Nikola was the newest high-profile EV firm to go stomach after failing to fulfill excessive expectations. Different EV startups that failed embody Lordstown, Proterra, and Fisker. TuSimple, a self-driving truck firm from China, pivoted to gaming tech.