Nikola files for Chapter 11 in the United States. It’s bankruptcy for the Arizona-based start up
With just under $50 million in cash on hand (but massive debts accumulated over the years), Nikola now wants to meet the needs of the case and begin orderly dismantling operations. Specifically, a portion of the cash will be used, as detailed in the very statement, for dealer support and management of the fleet of vehicles currently on the roads in North America.
The news was in the air, it was practically certain to come. In fact, here it is: on February 19, through a statement posted on the company’s website, Nikola announced that it has filed for Chapter 11 in the United States. In short, it means bankruptcy for Nikola. End of the road.
With just under $50 million in cash on hand (but massive debts accumulated over the years), Nikola now wants to meet the needs of the case and begin orderly dismantling operations. Specifically, a portion of the cash will be used, as detailed in the very statement, for dealer support and management of the fleet of vehicles currently on the roads in North America.
Nikola towards bankruptcy
From the end of March, “the company will need one or more partners to support such activities.” In other words, operations will most likely be discontinued. In the meantime, efforts will be made to place assets still owned by Nikola, for example, manufacturing assets, with the Phoenix-based company having already begun dismantling and selling, as we wrote here.
We have often talked about Nikola: it was one of the first start-ups to venture into the design and construction of electric and hydrogen-powered trucks, asking for IVECO’s cooperation in the first phase of its life, until the partnership was discontinued in 2023. Nikola faced so many hurdles, including the fraud charges filed against the first CEO, and founder, Trevor Milton, basically for lying about vehicle technology development. And then the recall of the first electric trucks produced and the decision to turn to hydrogen, a technology clearly not yet ready to support a project like Nikola’s.
The (final) statement of CEO Steve Girsky
“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.
“Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate. 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.”
