By Andrew Scurria, Soma Biswas and Colin Kellaher

Nikola, the hydrogen-truck maker that briefly sported a market value comparable to Ford Motor, has filed for bankruptcy with plans to wind down its business.

Now a penny stock, Nikola filed for chapter 11 on Wednesday in a Wilmington, Del., court, intending to conduct a court-supervised auction of its assets. The filing further swells the ranks of zero-emissions vehicle developers that have run out of road recently, following other Tesla wannabes that wound up in bankruptcy.

Many young companies in the electric-vehicle space have been hit hard by cooling demand, rising costs and a shifting political landscape in a second Trump administration that has put planned investments in zero-emissions autos at risk.

Nikola came to symbolize the excesses of the green-auto investment boom. It went public in 2020 without having sold a single truck before it was targeted in a short-seller report alleging that its founder, Trevor Milton, had overhyped its technology. Milton was convicted of securities fraud in 2022 for making misrepresentations to investors and given a four-year prison sentence, which he is appealing.

The Wall Street Journal reported earlier this month that Nikola was nearing a bankruptcy filing.

"Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate," said Steve Girsky, Nikola's president and chief executive. "Unfortunately, our very best efforts have not been enough to overcome these significant challenges."

The Phoenix company said it worked for months with its financial and legal advisers to find a way to sustain its operations before determining that a structured sale process was the best way to maximize the value of its assets.

Nikola enters chapter 11 with about $47 million in cash on hand and said it would continue to provide certain service and support operations for trucks currently in the field through the end of March. In a sworn declaration filed in bankruptcy court, Girsky said that Nikola ceased manufacturing new trucks to conserve cash and prepare for the sale of its assets through chapter 11.

Girsky cited a shortage of parts in the nascent hydrogen fuel-cell market that slowed production as one of the challenges the company faced. Lack of infrastructure or hydrogen supply for end-users has also been a major hurdle. Nikola has lost $3.6 billion in capital invested in the company since its inception, according to his filing.

The growing pile of green auto companies that have wound up bankrupt also includes Fisker Automotive, Lordstown Motors, Electric Last Mile Solutions and parts supplier Proterra.

Nikola warned that its stockholders could now see a total loss on their investment. The company enters chapter 11 owing $97.7 million in convertible notes and lease obligations, plus other trade debts that would need to be paid before stockholders could receive anything. Nikola shares were trading around a nominal 50 cents on Wednesday.

Girsky said that litigation against Nikola has also drained its cash. That includes roughly $80 million still owed to the Securities and Exchange Commission under a securities-fraud settlement from 2021.

Write to Andrew Scurria at Andrew.Scurria@wsj.com, Soma Biswas at soma.biswas@wsj.com and Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

February 19, 2025 10:41 ET (15:41 GMT)

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