Nikola Files for Chapter 11 Bankruptcy amid Cash Burn and Financing Challenges
Electric truck manufacturer Nikola has filed for Chapter 11 bankruptcy protection, court documents revealed on Wednesday. The move comes amidst dwindling cash reserves and difficulties in securing additional funding, exacerbated by uncertainties surrounding demand for its hydrogen-fueled and battery-powered heavy-duty vehicles.
According to the court filing, Nikola reported assets between $500 million and $1 billion, and estimated liabilities between $1 billion and $10 billion. Founded over a decade ago, the Phoenix-based company went public in June 2020 and delivered its initial vehicle in December 2021. In 2024, it scaled up production of hydrogen fuel-cell electric trucks.
However, Nikola faced persistent funding challenges and its cash balance diminished as it incurred substantial losses per vehicle sold. Fleet operators have shown reluctance in investing in charging infrastructure and adopting electric trucks due to budgetary constraints induced by rising interest rates, adversely impacting businesses like Nikola.