Nikola, an electric car startup that once hoped to become a heavier truck Tesla, filed for bankruptcy protection on Wednesday.
Founded in 2015, Nicola has committed to developing long-range semi-trucks equipped with hydrogen and electricity, and registered it on the stock exchange before selling a single vehicle in 2020. The stock price spiked temporarily as individual investors and some Wall Street companies wanted to bet on companies they thought could replicate Tesla's success and its rising stock price.
The short-lived enthusiasm of investors for Nikola has made founder Trevor Milton and other early investors wealthier. But soon, a major question emerged about Milton's claims about the company's technology and customer orders. He was soon exiled and later convicted of fraud.
In the most recent quarter, Nicola had started delivering a handful of electric trucks, but was too little to make money. Late last year, the company said it had $200 million in cash and $270 million in long-term debt. The stock fell sharply in early February after reports that the company was approaching bankruptcy filing.
The company said it had around $47 million in cash on hand in the release and intended to continue “limited” service and support for trucks on the road. Bankruptcy filing lists liabilities between $1 billion and $10 billion, bringing the number of creditors it owed to 1,000-5,000.
Nicola is one of several fledgling electric car companies that struggle to turn ideas into real cars and trucks.
Roadtown Motors, who attempted to build a pickup truck at its closed General Motors factory in Ohio, was charged in 2023 with bankruptcy protection and was charged by the Securities and Exchange Commission in 2024 with misleading investors.
The UK-based startup called Arrivals is planning to build electric vans and buses. However, they struggled to get the vehicle and manufacturing ideas to work, and sold the assets to another startup, Canoo. The company filed for bankruptcy protection last month.
While some electric car startups are still open, stock prices are falling, and it is not clear how and when profitability will be achieved.
Libian, which manufactures electric pickups and sports utility vehicles, is struggling to increase production to its original level, with its shares trading at just under $13 per share. Last year, the company secured a key lifeline when it established a partnership with German automaker Volkswagen, which took a large stake in Libian.
Lucid Motors manufactures luxury electric vehicles and SUVs, but is significantly lower than initial sales and production targets. It also wants to do business selling technology to other automakers.
“Like other companies in the electric vehicle industry, we face a variety of markets and macroeconomic factors that have influenced our operating capabilities,” Nicola CEO Steve Girsky said Wednesday. said in a statement. “Unfortunately, our best efforts were not sufficient to overcome these important challenges.”
