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Nikola Headquarters. (Photo = Nikola) |
[Alpha Biz= Paul Lee] U.S. electric vehicle startup Nikola filed for Chapter 11 bankruptcy protection on Wednesday (local time). Nikola’s stock plummeted 47% in pre-market trading to an all-time low of $0.40, just a day after surging 41% for its best trading session.
The company announced that it has been struggling with severe cash depletion over the past few quarters and plans to sell all or most of its assets.
Founded in 2015, Nikola gained recognition as a hydrogen truck manufacturer and went public in June 2020, delivering its first vehicle in December 2021. However, it faced a turbulent path after short-seller Hindenburg Research accused the company of misleading claims about its vehicle capabilities. Additionally, its founder was indicted on federal fraud charges.
Since last year, Nikola has ramped up production of hydrogen fuel cell electric trucks but struggled to secure funding. The company incurred hundreds of thousands of dollars in losses per vehicle, leading to a decline in cash reserves.
According to court documents, Nikola listed assets between $500 million and $1 billion, while liabilities were estimated between $1 billion and $10 billion.
The company stated that it will continue some on-site truck operations and hydrogen fuel supply work until the end of March.
Nikola’s bankruptcy follows the collapses of other EV startups, including Lordstown Motors in 2023 and Fisker and Proterra in 2024. High interest rates and capital shortages have led to the downfall of many capital-intensive startups in recent years.
For the past two years, Nikola had warned in its financial statements that significant doubts existed about its ability to continue as a going concern due to cash shortages and ongoing losses.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
