Nikola Motors, once the hottest startup in trucking's migration to zero emissions, filed for bankruptcy Wednesday after seeking but failing to find a buyer or raise new capital. Nikola has also filed a motion seeking authorization to pursue an auction and sale process under Section 363 of the U.S. Bankruptcy Code.
Nikola burst onto the scene in 2015, then led by brazen founder and CEO Trevor Milton and his promise of a high-horsepower, high-torque emissions-free tractor. The company eventually went public and became a Wall Street sensation with a net worth that reached $30 billion, making it more valuable than Ford.
Along the way, the company racked up partnerships with the likes of Bosch, Ryder and Iveco among them.
The company, however, couldn't stick the landing.
[Related: A quick spin in Nikola's Tre battery-electric semi]
"Unfortunately hundreds of heroes worked for multiple iterations of bad management," a former high level Nikola employee told CCJ. "Nikola lost sight of right sizing their business and fumbled the hydrogen play when they gave up on making it themselves, and gave up on real stations in favor of lower effort and [lower] capex fueling trailers. The result of which led to higher losses on hydrogen than on trucks. Needless to say many many heroes gave their all to to make this happen and to try to make it work with the resources and time given."
Mired in scandal
Milton in September 2020 stepped down as executive chairman of his Phoenix, Arizona-based hydrogen-electric upstart amid a firestorm of criticism sparked by stock short-seller Hindenburg Research, which released a report calling Nikola an “intricate fraud built on dozens of lies...,” and claimed to have evidence, including recorded phone calls, text messages, emails and more detailing alleged false statements by Milton.
A Manhattan jury in October 2022 found Milton guilty of illegally inflating the stock value of his company, concluding a trial that lasted almost exactly one month. Milton was charged the prior July with disseminating false and misleading information about the company's products and technological accomplishments (which caused the company's stock price and valuation to soar), and was facing two counts of securities fraud and two counts of wire fraud.
In October 2023 Milton was sentenced by U.S. District Judge Edgardo Ramos to four years in prison for engaging in securities and wire fraud in connection with his scheme to defraud and mislead investors about the development of products and technology by the company he founded.
The company has floundered since – its trucks, too, plagued by fire and recalls.
In a post to X, the former Twitter platform, Milton wrote Wednesday that he "saw this NKLA bankruptcy from a mile away," adding "this is what happens when you frame a founder for a crime they didn't commit, destroy the company's brand, lie to shareholders, take huge salaries, pillage the company's ip and run off into the sunset like the current management has done."
The path forward
Nikola on Wednesday filed a number of customary “first day” motions with the court to ensure its limited operations are able to continue, including authorization to meet its obligations to employees, during the sale process. Nikola enters Chapter 11 with approximately $47 million in cash. The company intends to continue certain limited non-dealer service and support operations for trucks currently on the road, including certain HYLA fueling operations through the end of March 2025.
“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, Girsky noted Nikola has faced various market and macroeconomic factors that have impacted its ability to operate. In recent months, Nikola has taken numerous actions to raise capital, reduce liabilities, clean up its balance sheet and preserve cash to sustain 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," Girsky said.
Nikola intends to market and sell all, substantially all, or a portion of its assets and effectuate an orderly wind down of its businesses.
