EV Semi Maker Nikola Files for Chapter 11 Bankruptcy Protection

On February 19, 2025, CNBC reported that Nikola Corp., once hailed as the future of zero-emission transportation, has filed for bankruptcy protection, marking a dramatic and unfortunate end to a journey that captivated Wall Street and retail investors alike. At its peak in 2020, the Phoenix-based semi-truck startup was valued at a staggering $30 billion, surpassing even the likes of Ford Motor in market value. But after years of turmoil, financial struggles, and a high-profile scandal involving its founder, Trevor Milton, the company now faces the reality of its decline, with plans to auction off its assets in a bid to navigate Chapter 11 bankruptcy.

The Rise and Fall of Nikola Corporation

Nikola’s story was one of ambition and innovation. The company set out to revolutionize the transportation industry with all-electric and hydrogen fuel-cell-powered semi-trucks. It seemed poised to lead the way into the future of sustainable trucking. In 2020, Nikola secured a deal with General Motors (GM) worth billions, and its valuation soared. It was seen as one of the shining stars of the electric vehicle (EV) revolution, even going public via a reverse merger with a Special Purpose Acquisition Company (SPAC), a popular route for EV startups at the time.

But Nikola’s fast-paced rise was overshadowed by controversy. The company’s founder, Trevor Milton, was accused of misleading investors with exaggerated claims about its technology and operational capabilities. A report from short-seller Hindenburg Research exposed key fabrications surrounding Nikola’s claims about its electric trucks, and Milton’s fall from grace was swift. In 2022, he was convicted of wire fraud and securities fraud, sending shockwaves through the market and tarnishing Nikola’s reputation beyond repair.

“Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate,” Nikola CEO Steve Girsky said in a release. “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 Financial Struggles and Decline

Despite efforts to press forward, including the production of Nikola’s all-electric and hydrogen-powered trucks, the company’s financial position continued to deteriorate. Nikola’s product development faced significant setbacks, including defects in the trucks it had produced, leading to costly recalls and a loss of investor confidence. As of the third quarter of 2023, Nikola had produced just 600 vehicles, far fewer than originally projected, with some units needing to be recalled due to defects.

Nikola’s financial troubles worsened as the company struggled to secure additional funding to continue operations. By the end of 2023, the company had only $198 million in cash on hand — insufficient to support its operations for much longer. Nikola’s leadership, including its new CEO, Stephen Girsky, struggled to move the company forward, but the warning signs were clear. In a desperate move, Nikola filed for bankruptcy protection in February 2025, citing a lack of capital and a failed attempt to secure a buyer or raise additional funds.

A Bitter End to a Bold Venture

Nikola’s downfall is a cautionary tale of how hype, scandals, and unchecked ambition can derail even the most promising startups. The company’s bankruptcy marks the end of what was once seen as a pioneering force in the electric vehicle industry. However, it also underscores the broader challenges faced by EV startups that rushed to go public in the wake of the SPAC boom. Many of these companies, like Nikola, failed to live up to their initial promises, caught in a cycle of federal investigations, executive instability, and financial mismanagement.

Nikola’s stock, which once traded as high as $80 per share in June 2020, has plummeted to under $2 per share since December 2024. For many investors, Nikola’s journey serves as a sobering reminder of the risks inherent in the speculative nature of the EV sector, where promises of revolution can sometimes outpace the reality of execution.

The Road Ahead for Nikola

As Nikola moves through the bankruptcy process, it will explore options to sell its assets in an attempt to exit Chapter 11. With approximately $47 million in cash to fund these proceedings, Nikola hopes to secure its future through an auction of its assets, allowing interested parties to acquire the company’s intellectual property and infrastructure free of debt.

The future of Nikola remains uncertain, but the company’s journey will continue to be studied as an example of the highs and lows of Silicon Valley-style ambition, the complexities of scaling revolutionary technology, and the harsh lessons of corporate accountability.

As for the rest of the electric vehicle industry, Nikola’s story serves as a reminder that not every startup is destined for greatness, no matter how promising the vision may seem. The road to success is far from straight, and for Nikola, that road has now come to a difficult, but necessary, halt.

EVinfo.net’s Take

EV critics will no doubt jump on this story as another example of how the EV industry is failing.

This opinion is certainly not true. The American EV industry is strong, and will keep growing. It’s become a vitally important part of growing America’s economy, contributing significant jobs and investment.

Powerful EV opponents are trying every effort possible they can to tear down the industry in favor of fossil fuels. But even for them, killing EVs will be impossible. EVs have come too far and can’t be stopped.

EVs are the most eco-friendly form of transportation currently available, and fight climate change. On top of that, EVs are the most cost-effective transportation over the long term.

It’s very clear that hydrogen (one of Nikola’s offerings) is not the answer for transportation. Battery electric vehicles (BEVs) are best. Hybrids are a stepping stone to full electrification. If you decide to go hybrid, we recommend plug-in hybrid vehicles, (PHEVs), the most eco-friendly and cost-effective hybrid.

EVinfo.net supports the EV industry with sponsored articles, interviews, and more.