Nikola, Electric Truck Maker, Files for Bankruptcy
The company, which once enjoyed a surging stock price, struggled to turn its plans for electric and hydrogen trucks into a viable business.
The company, which once enjoyed a surging stock price, struggled to turn its plans for electric and hydrogen trucks into a viable business.
Nikola, an electric vehicle start-up that had once hoped to become the Tesla of heavy trucks, filed for bankruptcy protection on Wednesday.
Founded in 2015, Nikola promised to develop long-haul semi trucks powered by hydrogen and electricity, and listed itself on the stock exchange in 2020 before it had sold a single vehicle. Its share price surged briefly as individual investors and some Wall Street firms clamored to bet on companies that they thought could replicate Tesla’s success and its soaring stock price.
Investors’ short-lived enthusiasm for Nikola made its founder, Trevor Milton, and other early investors wealthy. But before long, significant doubts emerged about Mr. Milton’s claims about the company’s technology and orders from customers. He soon resigned, and was later convicted on fraud charges.
In recent quarters, Nikola had begun delivering small numbers of electric trucks but far too few to make money. Late last year, the company said it had $200 million in cash and $270 million in long-term debt. Its stock plunged early this month on reports that the company was nearing a bankruptcy filing.
The company said in a release on Wednesday that it had about $47 million in cash on hand, and intended to continue “limited” service and support for trucks out on the road. The bankruptcy filing listed liabilities of $1 billion to $10 billion, and put the number of creditors the company owes at 1,000 to 5,000. Its largest creditor is the Securities and Exchange Commission, which is owed $80.2 million for a settlement the company reached with the agency in 2021.
The company said it intended to use the bankruptcy process to sell many or all of its assets and wind down its businesses.
