Nikola Corporation, an electric vehicle maker, has filed for Chapter 11 bankruptcy protection, citing market and macroeconomic challenges that have impacted its operations. The company will pursue a sale of its assets to maximize value and ensure an orderly wind down.
Nikola’s struggles in the electric vehicle sector are not unique, with several other startups, including Fisker, Proterra, and Lordstown Motors, filing for bankruptcy in recent years due to funding challenges and rapid cash burn. The company’s leadership has faced numerous changes, plummeting share values, and short-seller allegations.
In a statement, CEO Steve Girsky attributed the challenges to “market and macroeconomic factors” that have impacted the company’s ability to operate. Nikola’s assets are valued between $500 million and $1 billion, while its liabilities are estimated to be between $1 billion and $10 billion.
The company’s cash reserves dropped sharply to $198.3 million at the end of September, and it is entering Chapter 11 proceedings with $47 million in cash on hand. Nikola’s stock has fallen about 38% on Wednesday, valuing the company at less than $50 million.
The news comes as Tesla, an EV pioneer led by Elon Musk, reported its first drop in annual sales in 2024 due to high borrowing costs and an aging lineup. The electric vehicle industry faces increasing competition, operational challenges, and high costs, contributing to Nikola’s struggles.
Source: https://www.reuters.com/business/autos-transportation/struggling-e-truck-maker-nikola-files-chapter-11-bankruptcy-protection-2025-02-19