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Electric truck maker nikola corpChapter 11 was filed for insolvency conservation on Wednesday after failing to overcome the market and macroeconomic challenges.
CEO Steve Girski said in a statement, “Like other companies in the electric vehicle industry, we have faced various markets and macroeconomic factors that have affected our ability to operate our ability.”
Girski said that the company has taken “many action” to raise capital, reduce liabilities, clean its balance sheet and preserve cash to maintain operations in recent months, but it “important challenges” Was not enough to overcome. , He said that the “best possible passage” was for the company filed for insolvency conservation and its stakeholders.
Former auto officials warned that electric vehicle pushed ‘very soon and very fast’
By Wednesday, Nicola has about $ 47 million in cash to run things, while he tries to sell and reorganize the property. The company is demanding a court approval to sell its assets quickly to ensure that it has enough money to cover the cost. Insolvency process.
The two zero-furnaces were distributed for total transport from Nicola Corp, before an order of 100 vehicles. (Brittany Murray/Medianus Group/Long Beach Press-Teligram Getty Image/Getty Image)
It has not been sailing smoothly for the company, which went public in 2020 and in a short order, formed a strategic partnership with General Motors in which the Detroit Automker got a $ 2 billion equity share in Nicola.
According to the prosecution, the founder Trevor Milton, who stepped in 2020, entered 2020, in 2023 to confuse investors about the development of products and technology in 2023 to engage in securities and wire fraud and The plan to mislead was sentenced.
In 2023, the company recalled hundreds of its big-big trucks and stopped the sale of others, as it was discovered that a coolant leak inside a single battery pack was a possible cause of a truck fire at the company’s headquarters in Phoenix in June. Was found. that year.
EV manufacturer files for bankruptcy after piles cash
In addition to weak demand and operational challenges, the company has seen rapidly trading within its C-suits. Three different CEOs took over within a period of two years. Girsky took rudges in August 2023, but even under his leadership, the company’s capital was rapidly decreasing.
| Langer | Security | Last | Change | Change % |
|---|---|---|---|---|
| NKLA | Nikola Corp. | 0.47 | -0.30 |
-39.13% |
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On the company’s third quarter earnings call in October, Girski said, “We are checking every opportunity to optimize cash.” He estimated that the company had enough cash to fund only its predicted operating costs and fulfill its obligations through the first financial quarter of 2025.
Its stock has fallen by more than 70% year till date.
A Nicola Train Battery-Electric Heavy-Duty Truck is viewed on Nicola Corp-IVECO Spa Joint Electric Truck Plant, 15 September 2021 in Germany. (Through Andreas Gabert / Bloomberg Getty Image / Getty Image)
“Electric vehicle industry has continued to struggle between rising competition, operational challenges and high costs, leading most EV manufacturers who turn to chapter 11 to look towards the sale of an asset, or even That a liquidation, instead of restructuring the business, “Sara. Legal chief Fox in Fox Business told Fox Business.
Foss said Nikola is following a uniform path in bankruptcy, such as startup Fisher, who used June 2024 insolvency to influence the sale of his property; Lordstown Motor, which sold most of its assets to a vehicle of the former CEO of the company; And Proterra, who sold his commercial lines in August 2023 insolvency.
