Electric vehicle startup Nikola has filed for Chapter 11 bankruptcy protection, marking a significant downfall for the former Wall Street darling. At its peak in 2020, Nikola was valued at $27 billion and had signed a multibillion-dollar agreement with General Motors.
However, the company’s fortunes took a turn for the worse after it went public via a special-purpose acquisition company (SPAC) in 2020. A scathing report from short-seller firm Hindenburg Research in 2021 accused Nikola of being “an intricate fraud built on dozens of lies.” The company later settled charges with the Securities and Exchange Commission for $125 million.
Founder Trevor Milton was convicted of fraud in 2022 and sentenced to four years in prison. He claimed that executives framed him for a crime they didn’t commit, saying he had predicted the bankruptcy filing from afar.
Nikola CEO Steve Girsky attributed the company’s struggles to market and macroeconomic factors. The company plans to sell some assets and eventually exit Chapter 11, joining the ranks of other electric vehicle companies that have faced similar challenges.
Source: https://qz.com/nikola-bankrupt-failed-electric-ev-startup-fisker-canoo-1851765824