Nikola, an electrical automobile start-up that had as soon as hoped to grow to be the Tesla of heavy vehicles, filed for chapter safety on Wednesday.
Based in 2015, Nikola promised to develop long-haul semi vehicles powered by hydrogen and electrical energy, and listed itself on the inventory alternate in 2020 earlier than it had offered a single automobile. Its share worth surged briefly as particular person traders and a few Wall Road companies clamored to wager on firms that they thought might replicate Tesla’s success and its hovering inventory worth.
Buyers’ short-lived enthusiasm for Nikola made its founder, Trevor Milton, and different early traders rich. However earlier than lengthy, important doubts emerged about Mr. Milton’s claims concerning the firm’s expertise and orders from prospects. He was quickly ousted, and later convicted on fraud costs.
In latest quarters, Nikola had begun delivering small numbers of electrical vehicles however far too few to become profitable. Late final yr, the corporate mentioned it had $200 million in money and $270 million in long-term debt. Its inventory plunged in early February on stories that the corporate was nearing a chapter submitting.
The corporate said in a release it had about $47 million in money available, and meant to proceed “restricted” service and help for vehicles out on the highway. The chapter submitting listed liabilities of between $1 billion and $10 billion, and put the variety of collectors it owes at between 1,000 and 5,000.
Nikola is considered one of a number of fledgling electrical automobile firms which have struggled to show their concepts into precise automobiles and vehicles.
Lordstown Motors, which had tried to make pickup vehicles in a shuttered Basic Motors plant in Ohio, sought chapter safety in 2023, and in 2024 was charged with deceptive traders by the Securities and Alternate Fee.
A start-up primarily based in Britain referred to as Arrival deliberate to make electrical vans and buses. But it surely struggled to make its automobile and manufacturing concepts work after which offered its property to a different start-up, Canoo. That firm filed for chapter safety final month.
Just a few electrical automobile start-ups are nonetheless working although their share costs have tumbled and it’s not clear how or when they’ll grow to be worthwhile.
Rivian, which makes electrical pickups and sport-utility automobiles, has had hassle ramping up manufacturing to the degrees it initially aimed for, and its inventory now trades at slightly below $13 a share — a tenth of the place it was in late 2021. However the firm secured an essential lifeline final yr when it established a partnership with the German automaker Volkswagen, which has taken a giant stake in Rivian.
Lucid Motors makes luxurious electrical automobiles and S.U.V.s however has fallen nicely in need of its authentic gross sales and manufacturing targets. It, too, is hoping to make offers during which it sells its expertise to different automakers.
“Like different firms within the electrical automobile trade, we have now confronted numerous market and macroeconomic elements which have impacted our capacity to function,” Steve Girsky, Nikola’s chief govt, mentioned in a press release on Wednesday. “Sadly, our easiest efforts haven’t been sufficient to beat these important challenges.”
