Arizona-based startup Nikola Corporation filed for bankruptcy protection Wednesday.
Once a pin-up for a future filled with electric and hydrogen trucks, Nikola has officially petitioned for Chapter 11 bankruptcy, per a statement it published Wednesday. The news comes after its announcement at the end of the year that it had $270 million in long-term debt, at a time when it only had $200 million cash-on-hand. In the intervening months, that situation has only gotten worse, to the point where it is seeking authorization to pursue an auction and sale process. If approved, the bankruptcy proceeding would open the door for a potential bidder to purchase Nikola’s assets without its debts and liabilities.
“In recent months, we have taken numerous actions to raise capital, reduce our liabilities, clean up our balance sheet and preserve cash to sustain our operations,” said Steve Girsky, Nikola’s current President and CEO. “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.”
The bankruptcy proceedings affect Nikola’s truck-building operations, as well as its HYLA brand of hydrogen refueling stations. As of its February 19 announcement, the company says it has about $47 million in cash, and intends to provide “limited operations” while it works with the court to secure the necessary protections from its creditors to keep going after the end of March 2025. Over the coming weeks, it told the court it intends to provide non-dealer service and support operations for commercial trucks already in the field.
Nikola’s demise, at least as we currently know it, capstones years of trouble for the fledgling startup. The company was founded in 2014, but was knocked into a tailspin in 2020 when short-selling firm Hindenburg Research published a report accusing founder and then-CEO Trevor Milton of defrauding investors. Following a Securities and Exchange Commission (SEC) investigation, a jury convicted Milton of several charges, including securities and wire fraud, in October 2022. He was sentenced to four years in prison in December 2023, but is currently out on bail while he appeals his case, as of late last year.
Nikola Corporation has since tried to spin up its commercial truck operation, though the Badger pickup truck — which GM was originally going to assist the automaker in bringing to production before the Hindenburg piece went public — never made it to production. It hasn’t been able to deliver enough trucks to turn a profit, however, and now the company joins the likes of Lordstown Motors and Fisker as the another high-profile electric startup to fail in the past few years.
