Nikola Company has entered bankruptcy protection under Chapter 11 because poor market demand and heavy losses combined with financial shortcomings forced the company to sell off its assets. Nikola has joined the list of defunct EV companies together with Fisker and Proterra and Lordstown Motors.
Nikola experienced massive financial decline after its USD 27 billion peak valuation because it dealt with executive leadership problems together with safety issues and decreasing stock market value. Shares of the company fell by nearly 38% on Wednesday causing the market value to decline under USD 50 million.
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EV industrial leader Steve Girsky declared that marketplace forces together with economic variables resulted in operational difficulties. Our greatest efforts failed to overcome these obstacles because of unresolvable market and economic factors.
Nikola first built a product line of battery-electric semi-trucks but later shifted to producing hydrogen-powered vehicles. Multiple fire occurrences during 2023 triggered a complete recall that severely weakened people’s trust in the company’s operation. Despite increasing production of hydrogen trucks for 2024 the company faced ongoing losses because fleet operators showed reluctance to purchase alternative fuel equipment because of high financing expenses.
From March onward the company will maintain minimal assistance for its truck manufacturing and hydrogen fuel infrastructures. Nikola reported bankruptcy in Delaware following a declaration that its assets range from USD 500 million to USD 1 billion and its liabilities span from USD 1 billion to USD 10 billion based on its bankruptcy filing data.
At the moment Nikola reported its bankruptcy filing its available money totaled only USD 47 million while September showed USD 198.3 million available cash and December 2023 recorded USD 464.7 million.
Nikola started its downfall as a promising startup right after its 2020 initial public offering through the SPAC merger program. Hindenburg Research aimed its short-seller attack against Nikola after the company rejected its claims of fraudulent activity. In 2022, founder and former CEO Trevor Milton was convicted of fraud and later sentenced to four years in prison.
The company’s bankruptcy underscores the broader struggles in the EV sector, where high costs, regulatory hurdles, and waning investor confidence continue to challenge industry players.
