After a number of setbacks, electric vehicle (EV) manufacturer Nikola has filed Chapter 11 bankruptcy protection, citing challenges the market is currently facing.
According to the filing, Nikola President and CEO Stephen J. Girsky said the voluntarily recall of all battery-powered vehicles sold to date in the third quarter of 2023, and the subsequent need to replace the battery packs, led to approximately $44 million in losses.
“Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate,” read a statement on the company website. “In recent months, we have taken numerous actions to raise capital, reduce our liabilities, clean up our balance sheet and preserve cash to sustain our 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.”
The filing also opens the door for possible buyers, who will be able to purchase the company or its assets without being liable for its debt.
Nikola has seen its fair share of bumps along the way, starting with company founder Trevor Milton. After stepping down in 2020, he was found guilty of securities and wire fraud in 2022. Milton was sentenced to four years in prison.
The company had recently announced a milestone this past January — 1 million in-service miles of its updated battery-electric Class 8 truck — as well as the push to develop hydrogen fueling infrastructure through its HYLA brand.
