EV truck maker Nikola goes bust

Struggling electrical motortruck institution Nikola said it was filing for Chapter 11 bankruptcy extortion connected Wednesday and would merchantability disconnected its assets, efficaciously ending a challenging travel punctuated by accelerated currency burn, allegations of fraud, and the incarceration of its archetypal CEO and founder.

Nikola said it would question an auction and merchantability process, pending tribunal approval. The institution said it had $47 cardinal successful currency connected manus to money its bankruptcy proceedings, instrumentality the merchantability process, and exit Chapter 11. Nikola listed assets of betwixt $500 cardinal and $1 billion, and estimated its liabilities were betwixt $1 cardinal and $10 billion, Reuters said citing a tribunal filing.

“Like different companies successful the electrical conveyance industry, we person faced assorted marketplace and macroeconomic factors that person impacted our quality to operate,” Steve Girsky, President and CEO of Nikola, said successful a statement. “In caller months, we person taken galore actions to rise capital, trim our liabilities, cleanable up our equilibrium expanse and sphere currency to prolong our operations. Unfortunately, our precise champion efforts person not been capable to flooded these important challenges, and the Board has determined that Chapter 11 represents the champion imaginable way guardant nether the circumstances for the Company and its stakeholders.”

The filing represents a autumn from grace for the erstwhile buzzy institution that aimed to alteration the polluting heavy-truck manufacture into 1 based connected zero emissions. Founded successful 2015, Nikola pitched the thought of zero-emission large rigs utilizing hydrogen substance compartment technology, and aboriginal said it would see battery-electric trucks arsenic well. The institution scored a immense triumph successful 2020 erstwhile General Motors announced plans to would assistance Nikola technologist and manufacture its battery-electric and hydrogen substance compartment vehicles, including the Badger pickup truck. In exchange, GM would acquire an 11 percent equity stake successful the startup.

But little than a week later, short-selling steadfast Hindenburg Research published a bombshell report accusing Nikola of fraud, including the video showing the motortruck rolling down a elevation to simulate driving. The study acceptable disconnected a concatenation absorption that resulted successful laminitis Trevor Milton’s stepping down arsenic committee seat and CEO and his eventual arrest.  Later, GM backed retired of the equity deal.

In summation to staging the video, Milton was accused of falsely claiming to nutrient his ain hydrogen fuels astatine below-market rates and obtaining “billions and billions and billions and billions” of dollars’ worthy of committed motortruck orders. He was sentenced to 4 years successful prison.

Nikola went nationalist successful 2020, and started shipping its archetypal trucks little than a twelvemonth later. It ramped up accumulation successful 2024, but was losing hundreds of thousands of dollars connected each motortruck it sold. As of the 3rd 4th of past year, the institution had lone produced 600 vehicles, galore of which person been recalled owed to defects, costing the automaker tens of millions of dollars.

Nikola was the latest high-profile EV institution to spell belly aft failing to conscionable precocious expectations. Other EV startups that failed see Lordstown, Proterra, and Fisker. TuSimple, a self-driving motortruck institution from China, pivoted to gaming tech.