Nikola’s Journey to Bankruptcy
Nikola Corporation, the Phoenix-based electric vehicle startup, has recently filed for Chapter 11 bankruptcy. This significant decision marks the culmination of a tumultuous decade since the company was established in 2014. Initially dedicated to both electric and hydrogen fuel-cell vehicles, Nikola aimed to revolutionize commercial transportation.
Challenges and Legal Troubles
In 2020, Nikola introduced the Badger, an electric pickup truck boasting both EV and hydrogen powertrains. Anticipation grew as General Motors partnered with Nikola to develop the vehicle ahead of a planned 2022 launch. Unfortunately, this optimism was short-lived; allegations of fraud surfaced, leading to the conviction of former CEO Trevor Milton on multiple charges in 2022. Following Milton’s fallout, Nikola shifted its focus away from consumer vehicles and concentrated on commercial trucks.
Financial Struggles and Future Plans
Despite delivering its first electric semi-trucks in 2022, Nikola has struggled to generate sufficient revenue to remain profitable. Reports of severe financial strain became apparent when the company disclosed $200 million in cash against $270 million in long-term debt. News regarding the impending bankruptcy announcement led the company’s stock price to plunge under a dollar earlier this month. Nikola’s bankruptcy filing reveals a meager $47 million in cash, with liabilities estimating between $1 billion and $10 billion, impacting an estimated 1,000 to 5,000 creditors. The company’s plans for the future involve providing “limited” support for trucks already on the road.
Nikola is now the third high-profile EV startup to declare bankruptcy in recent years, joining Lordstown Motors and Fisker in this disheartening trend within the electric vehicle industry.
