Electric vehicle manufacturer Nikola (NASDAQ:NKLA) has announced it has filed for Chapter 11 bankruptcy protection and plans a sale of its assets. This is the latest electric-vehicle company to run into trouble because of lukewarm demand, rapid cash burn and funding challenges.
In recent years several EV makes that went public during the pandemic have crashed and burned: Fisker (OTC:FSRNQ), Proterra and Lordstown Motors (OTC:NRDE) have filed for bankruptcy in recent years as funding for the capital-intensive operations dried up due to high interest rates and flagging demand.
Nikola, which started off making battery-powered semi trucks and pivoted to electric trucks that use hydrogen, said it decided to initiate a sale process of its assets to maximize value and ensure an orderly wind down.
The firm will continue some operations for trucks in the field and some hydrogen-fueling operations through the end of March.
“Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate,” CEO Steve Girsky said in a statement.
“Unfortunately, our very best efforts have not been enough to overcome these significant challenges,” he added.
Nikola listed assets of between $500 million and $1 billion, and estimated its liabilities were between $1 billion and $10 billion, according to a court filing.
The stock fell about 45% on Wednesday premarket to around 41 cents.