- Nikola files for Chapter 11 bankruptcy after struggling with financial losses, fraud allegations, and leadership scandals.
- Once a rising EV truck startup, Nikola collapsed after failed partnerships, production setbacks, and costly recalls.
- Joins a wave of EV industry bankruptcies, including Lordstown, Proterra, and Fisker, as startups struggle to survive.
Electric truck manufacturer Nikola has filed for Chapter 11 bankruptcy protection, marking the collapse of another ambitious startup in the struggling EV sector. The company announced plans to auction off its assets following court approval, bringing an end to years of financial turbulence, allegations of fraud, and the legal downfall of its founder. Despite efforts to restructure and secure new capital, Nikola was unable to overcome mounting challenges in the competitive zero-emissions trucking industry.
The bankruptcy filing reveals Nikola holds $47 million in cash to fund the proceedings and facilitate its sale process. The company listed assets between $500 million and $1 billion, with liabilities estimated between $1 billion and $10 billion. Founded in 2015, Nikola aimed to revolutionize freight transportation with hydrogen fuel cell and battery-electric trucks. However, its ambitious vision clashed with harsh economic realities, forcing the company into a downward spiral of financial distress and credibility issues.
Once a rising star in the EV industry, Nikola secured a major partnership in 2020 when General Motors agreed to help develop its battery-electric and hydrogen-powered vehicles. GM also planned to acquire an 11 percent stake in the company. But the deal quickly unraveled after short-seller Hindenburg Research published a damning report alleging widespread fraud. Among the most infamous claims was that Nikola staged a promotional video by rolling a truck downhill to make it appear functional. The scandal triggered an industry-wide reckoning, leading to the resignation and eventual imprisonment of Nikola’s founder, Trevor Milton.
Following Milton’s exit, Nikola struggled to regain stability. The company went public in 2020 and began delivering trucks the following year, but production ramped up too late to stave off heavy losses. By 2024, Nikola was selling vehicles at a steep loss, with only 600 trucks produced, many of which were recalled due to safety issues. The financial strain proved too severe, despite attempts to cut costs and streamline operations.
Nikola now joins a growing list of EV startups that have collapsed after failing to meet expectations. Other companies, including Lordstown Motors, Proterra, and Fisker, also filed for bankruptcy in recent years, while self-driving truck firm TuSimple abandoned its original vision and pivoted to gaming technology. The industry’s turmoil highlights the steep challenges facing newcomers in the capital-intensive electric vehicle market, where only a handful of players have managed to survive.
