The embattled EV truck maker Nikola is going kaput. The company just announced a filing for Chapter 11 bankruptcy protection and a plan to sell off assets. These assets will be sold at an auction, pending court approval. Nikola noted it has $47 million in cash on hand to fund the bankruptcy proceedings and begin the sale process. The company has reported between $500 million to $1 billion in assets, but liabilities totaling $1 billion to $10 billion, according to a court 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, President and CEO of Nikola.
Those market and macroeconomic factors are real, as EV adoption growth rates have slowed a bit. However, Nikola is a special case. The company has been embroiled in numerous scandals in recent years, so this news caps off a particularly dire fall from grace for the once-buzzy EV maker.
Nikola was founded in 2015 with a mission to create zero-emissions heavy trucks. The company secured a lucrative partnership with GM in 2020, but things fell apart soon thereafter. It was credibly accused of fraud, thanks to a report by short-selling firm Hindenburg Research. This report even included a video showing a Nikola truck rolling down a hill to simulate driving.
Our investigation of the site and text messages from a former employee reveal that the video was an elaborate ruse— $NKLA had the truck towed to the top of a hill on a remote stretch of road and simply filmed it rolling down the hill. pic.twitter.com/n2NLDGInzR
— Hindenburg Research (@HindenburgRes) September 10, 2020
This “elaborate ruse” caused the SEC to begin an investigation which led to founder Trevor Milton stepping down as board chair and CEO. Later, he was arrested and indicted on fraud charges. Milton was found guilty and sentenced to four years in prison. The company settled with the SEC for $125 million. It goes without saying that GM backed out of that partnership.
The company did go public in 2020 and began shipping its first trucks in 2021. However, reports indicated that Nikola was losing hundreds of thousands of dollars on every truck it sold. All told, the company only made around 600 vehicles, many of which were recalled due to a variety of defects.
This subpar performance caused the stock to crater, stumbling from a high of over $1,000 per share to, as of this writing, $0.47 per share. I guess only one company named after the guy who invented alternating current (AC) energy is allowed to consistently fall below expectations without making a dent on its valuation.
This article originally appeared on Engadget at https://www.engadget.com/transportation/evs/ev-truck-maker-nikola-has-finally-called-it-quits-172516625.html?src=rss