Hydrogen electric trucking startup Nikola Corp. filed for Chapter 11 bankruptcy protection Wednesday after it failed to find a buyer or secure additional funds to maintain operations.
Nikola was once a Silicon Valley darling, valued at $30 billion in June 2020 after it went public through a special purpose acquisition merger. But a series of scandals surrounding its founder and former CEO Trevor Milton put the company into free fall.
Now, Nikola plans to go to auction with its assets, pending court approval, according to a regulatory filing.
“Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate,” Steve Girsky, president and CEO of Nikola, said in a statement.
“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.”
The company has about $47 million in cash on hand to fund its bankruptcy process. Nikola’s proposed bidding process would allow interested parties to submit binding offers to acquire Nikola’s assets, independent of the company’s debt or liabilities.
Some of those assets would include Nikola’s Class 8 hydrogen fuel cell electric trucks and battery electric truck platforms. Nikola had also been in the process of developing a HYLA hydrogen refueling highway in California.
The bankruptcy filing caps a yearslong unraveling. Nikola had been considered a golden example of a SPAC gone right, and had even closed a multi-billion dollar deal with General Motors. Until Milton was accused of fraud for making exaggerated claims about the company’s electric truck technology.
Prosecutors in the case against Milton claimed that he had deceived investors since 2019 by lying about Nikola having built a truck from the “ground up” and …