Struggling electric truck company Nikola said it was filing for Chapter 11 bankruptcy protection on Wednesday and would sell off its assets, effectively ... ## Nikola Files for Bankruptcy: End of a Tumultuous Journey ### Introduction Nikola Motor Company, a pioneering electric truck manufacturer, has filed for Chapter 11 bankruptcy protection, marking the culmination of a turbulent period characterized by rapid cash burn, allegations of fraud, and executive arrests. ### Asset Sale and Company Value Seeking an auction and sale process, Nikola has an estimated $47 million in cash to support its bankruptcy proceedings. The company's assets are valued between $500 million and $1 billion, while its liabilities range from $1 billion to $10 billion. ### CEO Statement on Market Challenges Nikola President and CEO Steve Girsky attributed the company's struggles to industry-wide market and economic factors that have hindered operations. Despite efforts to raise capital, reduce expenses, and preserve cash, Chapter 11 was deemed necessary as the best path forward for stakeholders. ### Hydrogen and Battery-Electric Focus Nikola's initial vision aimed to transform the heavy-truck industry using hydrogen fuel cell technology. Later, the company expanded to include battery-electric trucks. A notable partnership with General Motors involved collaboration on vehicle engineering and manufacturing, with GM acquiring an equity stake. ### Fraud Allegations and Executive Arrests A bombshell report by Hindenburg Research in 2020 ignited a chain reaction of events. Nikola founder Trevor Milton was accused of fraud, including a staged video pretending to showcase an operational truck. These allegations led to his resignation, arrest, and subsequent prison sentence. ### Financial Struggles and Product Recalls Going public in 2020, Nikola began shipping its first trucks a year later. However, production ramp-up faced challenges, with significant losses incurred per vehicle sold. As of 2023, only 600 vehicles had been produced, many of which were recalled due to defects, resulting in substantial costs. ### Industry-Wide Challenges Amidst high expectations, Nikola joins a growing list of failed EV startups, including Lordstown, Proterra, Fisker, and TuSimple. The challenges faced by these companies underscore the difficulties of meeting ambitious expectations in the burgeoning electric vehicle market.
