The Wall Street Journal, citing people familiar with the matter, reports that electric vehicle maker Nikola is preparing to file for bankruptcy.
Electric truck maker Nikola is reportedly nearing a bankruptcy filing, according to the Wall Street Journal. The company’s shares dropped 20% to $0.60 in after-hours trading on February 6th.
Nikola has been considering selling a part or all of the company. As of the end of September 2024, their cash and cash equivalents stood at $198 million, a significant decrease from $464 million at the end of 2023.
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The company’s shares have lost over 99% of their value since their listing in 2020. The stock has fallen below $1 on multiple occasions, and the company has had to perform several stock splits to comply with Nasdaq’s listing rules.
Last year, Nikola’s Chief Financial Officer, Thomas Okray, informed investors that the company only had enough cash to operate through April 2024. According to their Q3 2024 financial report, the company manufactured over 80 trucks with a net loss of nearly $200 million.
Nikola was founded in 2014 and was once seen as a rival to Tesla. In 2022, the company’s founder and former CEO, Trevor Milton, was convicted of fraud for exaggerating the company’s business prospects and technology capabilities. He was sentenced to four years in prison and is currently appealing the decision.
Nikola is not the only electric vehicle maker facing challenges. Several American EV startups, such as Fisker and Canoo, have filed for bankruptcy. Even established automakers like Ford and GM have scaled back production and delayed plans for new electric vehicle launches. Tesla, the world’s largest EV manufacturer, has also warned of a “significant slowdown in growth.”
Thai Son (Tuoitrethudo)
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