MW Another EV maker goes bust, as Nikola files for bankruptcy

By Tomi Kilgore

Nikola to pursue an auction and sale of its assets, and will continue 'limited operations' during the sale process

Nikola Corp. became the latest EV maker to go bankrupt on Wednesday, as the Phoenix-based battery-electric and fuel-cell-electric truck maker voluntarily filed for Chapter 11.

The company said it has also filed to pursue an auction and sale process, and to ensure its "limited operations" can continue, including paying its employees, during the sale process.

Nikola's stock $(NKLA)$ plunged 49.1% in premarket trading toward a record low. The selloff comes a day after it had soared 41.4%, to have its best day since July 13, 2023.

Among other EV makers, Tesla Inc.'s stock $(TSLA)$ rose 0.1% ahead of the open, Rivian Automotive Inc.'s stock $(RIVN)$ slipped 0.3% and Mullen Automotive Inc. shares (MULN) shed 3.6%.

"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," said Chief Executive Steve Girsky. "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 company's bankruptcy comes after Fisker went bankrupt in 2024 and Lordstown Motors filed for bankruptcy in 2023.

The company said it has about $47 million in cash on hand to fund its activities through the sale process. The company plans to provide limited service and support for its trucks currently in use, including certain hydrogen fueling operations, through March 2025.

Nikola's bankruptcy wasn't exactly a surprise. The company has been warning in its audited financial filings for the past two years that, given its funding needs and continued losses, there was substantial doubt about its ability to continue as a going concern.

The company had enacted a 1-for-30 reverse stock split in June 2024, when the stock was trading just above 30 cents a share, to boost its share price so it could stay listed on the Nasdaq exchange.

-Tomi Kilgore

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February 19, 2025 08:23 ET (13:23 GMT)

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