Nikola Corp. Files For Chapter 11 Bankruptcy Amid Escalating Setbacks

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(RTTNews) - Nikola Corp. has filed for Chapter 11 bankruptcy protection while actively pursuing an asset sale, marking a pivotal juncture for the once-promising electric vehicle pioneer.

Once celebrated as a trailblazer in the EV industry, the Phoenix-headquartered firm has been beleaguered by persistent challenges, including muted demand, rapid cash depletion, and severe funding constraints.

Originally focused on battery-powered semi-trucks, Nikola transitioned to hydrogen-powered electric trucks in an effort to redefine its market position.

However, this strategic pivot has been undermined by a succession of setbacks: continual executive reshuffles, a dramatic decline in market capitalization—from a zenith of roughly $27 billion in 2020 to less than $50 million today—and escalating safety concerns following several vehicular fire incidents that triggered a comprehensive recall.

Despite vigorous efforts to raise capital, trim liabilities, and stabilize its balance sheet, these initiatives have proven insufficient. With a remaining cash reserve of only $47 million, Nikola plans to sustain minimal support for its truck fleet and hydrogen-fueling network while orchestrating an orderly divestiture of assets.

This bankruptcy filing mirrors the broader turbulence in the EV sector, where mounting interest rates and intensified competition have similarly challenged other startups striving to revolutionize transportation.