Nikola Files for Bankruptcy, Plans to Sell Core Assets

Nikola, the electric-truck maker once heralded as a future disruptor, has filed for Chapter 11 bankruptcy protection following a steep decline in cash reserves, underwhelming sales, and waning investor confidence. Despite ramping up production of its hydrogen-fuel-cell trucks in 2024 and undergoing multiple leadership changes, Nikola struggled to secure sustainable funding for its capital-intensive operations. High interest rates, reduced fleet operator budgets, and tepid demand for commercial EVs ultimately exacerbated the startup’s challenges.

The company now intends to dispose of some or most of its assets to maximize value and facilitate a structured wind-down. Nikola will maintain limited support services for trucks already on the road and certain hydrogen-fueling operations through March, while looking for potential buyers. Once valued at billions when it went public in 2020, Nikola’s brand suffered a hit following fraud convictions of founder Trevor Milton, who was found guilty of misrepresenting the startup’s technological capabilities.

This Chapter 11 filing echoes the difficulties faced by several EV startups that debuted during the pandemic-era SPAC boom, including Lordstown Motors and Proterra. Now that the era of easy capital appears to be over, Nikola’s downfall signals that novel tech and big ideas aren’t always enough to keep emergent automakers afloat in a fiercely competitive market.