Electric Truck Maker Nikola Goes Bankrupt

Nikola has officially filed for Chapter 11 bankruptcy due to declining market demand, massive financial losses, and liquidity issues that forced the company to sell off assets. The company now joins the growing list of struggling electric vehicle manufacturers, including Fisker, Proterra, and Lordstown Motors.

Nikola, once valued at $27 billion, has faced a significant financial downturn due to executive management issues, safety concerns, and a steep decline in its stock value. On Wednesday, the company"s shares plummeted by approximately 38%, reducing its market capitalization to under $50 million.

Steve Girsky, a key figure in the EV industry, stated that Nikola’s operational challenges resulted from market conditions and economic difficulties. He emphasized that despite the company’s best efforts, these challenges were beyond its control.

Nikola initially focused on producing battery-electric semi-trucks before shifting towards hydrogen-powered vehicles. However, the company encountered several obstacles, including multiple fire incidents in 2023, leading to recalls of affected trucks and damaging customer confidence.

Despite plans to ramp up hydrogen truck production in 2024, Nikola continued to record losses, as fleet operators hesitated to invest in alternative fuel technologies due to high costs.

Starting in March, the company will continue minimal operations to manufacture trucks and develop hydrogen fuel infrastructure.

Nikola filed for bankruptcy in Delaware, with court documents revealing that the company’s assets range between $500 million and $1 billion, while its liabilities fall between $1 billion and $10 billion.

Currently, Nikola holds only $47 million in available funds, a sharp decline from the $198.3 million it had in September and the $464.7 million available in December 2023.