Nicola Corporation, once a promising name for electric trucks, filed for Chapter 11 bankruptcy protection in Delaware. The Phoenix-based company known for its battery-electric and hydrogen-powered trucks filed Wednesday, showing another collapse in the struggling EV sector.
The move comes just two years after the company founder Trevor Milton was sentenced to four years in prison for fraudulent investors. Milton’s belief comes from Nicola’s exaggerated claims about technology.
As part of the bankruptcy process, Nicola is installing assets at auctions while maintaining a skeleton crew to maintain a limited business. Employees will continue to be paid during the transition. However, investors were hit hard. Nicola’s shares fell 51.1% in pre-market trading, eliminating the previous day’s 41.4% spike.
“Nikola Corp. became the latest EV maker to bankrupt on Wednesday. The company pursues auction as a Phoenix-based battery-electric and fuel cell electric truck and van maker voluntarily filed for Chapter 11. “We can ensure “restricted operations” including employee payments during the sales process,” MarketWatch reported.
CEO Steve Girsky attributed the downfall to economic pressures and market challenges, saying efforts to secure funding and reduce debt were not enough to lift the company. Nicola currently has about $47 million in cash to maintain the business during the sales process. Until March 2025, we plan to provide limited services and hydrogen fuel support for existing vehicles.
The company’s problems did not begin with bankruptcy. Milton’s fraud conviction in 2022 cast a long shadow on Nicola’s future, eroding her reputation and investor confidence. During his sentence, Milton made an unusual plea citing, citing personal difficulties such as his Cherokee legacy, his wife’s Lyme disease, his mother’s battle with breast cancer, and his relationship with the LDS faith.
Nicola was founded in Salt Lake City with the aim of revolutionizing rugged trucking through hydrogen-electric technology. However, in 2020, despite seven years of business and a well-known public list via SPAC, the company did not sell a single vehicle.
Named after inventor Nikola Tesla, the company once sought to reconstruct the future of transportation. Now it is another warning material in the EV industry, with bold claims and high expectations often clashing with harsh financial realities.
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