Major electric semi truck maker Nikola files for bankruptcy and winds down operations
One of the nation’s most prominent electric commercial vehicle startups has filed for bankruptcy protection.
On February 19, Phoenix, Arizona-headquartered Nikola Corporation announced that the company has filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware.
The company says it worked to identify alternative solutions to allow the business to remain financially solvent, but company leaders and financial and legal advisors determined that the best path forward would be to file for bankruptcy and to wind down operations in an orderly fashion.
“With the dedication of our employees and support from our partners, Nikola has taken significant steps to move zero-emissions transportation forward, including bringing the first commercially available Class 8 hydrogen fuel cell electric trucks to market in North America and developing the HYLA hydrogen refueling highway, connecting Northern California to Southern California,” said Steve Girsky, President and CEO of Nikola. “Our customers have accumulated approximately 3.3 million fleet miles across both our FCEV and BEV truck platforms and our HYLA fueling network has dispensed well over 330 metric tons of hydrogen. Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate. In recent months, we have taken numerous actions to raise capital, reduce our liabilities, clean up our balance sheet and preserve cash to sustain our operations. Unfortunately, our very best efforts have not been enough to overcome these significant challenges, and the Board has determined that Chapter 11 represents the best possible path forward under the circumstances for the Company and its stakeholders.”
Nikola also announced plans to pursue an auction and sale of the company’s assets.
Founded in 2015, Nikola came under investigation by the U.S. Securities and Exchange Commission (SEC) in 2021 over a promotional video for the Nikola One semi truck prototype.
Federal authorities accused the company of misleading investors by using a staged video to promote the Nikola One semi truck prototype that falsely claimed that the electric truck was fully functional and operating under its own power when in actuality, the truck was filmed rolling down a hill.
From a 2021 complaint filed against Milton by the SEC:
“For the commercial shoot, the non-functioning Nikola One prototype truck was hauled to the shooting location by a lowboy semi-truck trailer. At this time, and more than a year after the unveiling event, the Nikola One still could not run under its own power. It was towed to the top of an inclined stretch of road and then filmed rolling down the incline. This towing-and-rolling process was repeated three times to have sufficient footage for Company 1’s commercial.“
The company did not admit wrong-doing but paid $125 million to settle with the SEC.
Company founder Trevor Milton resigned from Nikola in 2020. Milton was found guilty of one count of securities fraud and two counts of wire fraud in October 2022. In 2023, he was sentenced to four years in prison and ordered to pay a $1 million fine.