Nikola Corporation, once a rising star in the zero-emissions trucking industry, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware. The Phoenix-based company, which has faced persistent financial and operational hurdles, is seeking to auction and sell its assets under Section 363 of the U.S. Bankruptcy Code.
The company enters bankruptcy proceedings with approximately $47 million in cash on hand, which it plans to use to sustain limited operations and facilitate an orderly sale process. As part of its restructuring efforts, Nikola has filed a series of motions to continue paying employees and maintaining certain services, particularly for its hydrogen fuel cell and battery-electric trucks. The company expects to support existing truck operations and HYLA fueling stations through March 2025 but will need external partners to continue beyond that period.
Nikola’s financial troubles underscore the mounting challenges facing electric vehicle startups, many of which have struggled to maintain profitability amid shifting market conditions. Despite its early promise—including the rollout of the first commercially available Class 8 hydrogen fuel cell electric trucks in North America and the development of a hydrogen refueling network—Nikola has been unable to generate the necessary capital to sustain operations.
“Like other companies in the EV industry, we have faced various market and macroeconomic factors that have impacted our ability to operate,” Nikola CEO Steve Girsky said in a statement. “Despite our best efforts to raise capital and preserve cash, these challenges proved insurmountable. Chapter 11 represents the best possible path forward for the company and its stakeholders.”
Nikola and its advisors spent months exploring alternative solutions to keep the business afloat, but ultimately determined that a structured asset sale would maximize value for stakeholders. The company plans to market and sell either all or portions of its assets, subject to approval by the bankruptcy court. The proposed bidding procedures, if approved, will allow potential buyers—including strategic industry players and financial investors—to submit binding offers.
The filing marks a dramatic shift for a company that once positioned itself at the forefront of sustainable commercial transportation. Founded with ambitions to revolutionize the trucking industry, Nikola faced significant setbacks, including leadership controversies and financial instability. The company’s struggles were compounded by a challenging economic environment, supply chain disruptions, and declining investor confidence in the EV sector.
Nikola’s Collapse Marks the End of a Once-Promising EV Startup
Nikola Corporation’s bankruptcy filing is the culmination of a yearslong unraveling, marking a stark downfall for a company once heralded as a success story of the SPAC boom. At its peak, the electric truck maker secured a multibillion-dollar partnership with General Motors and was seen as a disruptive force in the zero-emissions transportation sector. But the company’s fortunes shifted dramatically after its founder, Trevor Milton, was accused of fraud.
Federal prosecutors alleged that Milton had misled investors since 2019, falsely claiming that Nikola had independently built a working electric truck and developed proprietary battery technology—when, in reality, the batteries were sourced from third parties.
The turning point came with a widely scrutinized marketing video that showed a Nikola truck appearing to move under its own power. In truth, the vehicle was simply rolling down a hill. The video’s exposure, coupled with a scathing report from short-seller Hindenburg Research labeling Nikola a fraud, triggered Milton’s resignation in September 2020.
By 2022, Milton was convicted of wire and securities fraud and sentenced to four years in prison, though he remains free on bail pending appeal. Nikola, meanwhile, reached a $125 million settlement with the U.S. Securities and Exchange Commission. Its stock plummeted, wiping out billions in investor value.
Nikola’s legal counsel includes Pillsbury Winthrop Shaw Pittman LLP and Potter Anderson & Corroon LLP, while Houlihan Lokey Capital, Inc. serves as its investment banker. The company’s financial advisor is M3 Partners. Stakeholders and interested buyers can access additional information about the sale process through Epiq Corporate Restructuring, LLC.