Electric truck maker Nikola Corp. (NASDAQ:NKLA), once a $30 billion company that surpassed Ford Motor Co. (NYSE:F) in market value, is preparing for a potential bankruptcy filing, marking one of the most dramatic downfalls in the electric vehicle industry’s history.
What Happened: The Phoenix-based company, which captivated Wall Street during the 2020 EV boom with its promises of revolutionary hydrogen-powered trucks, is now working with law firm Pillsbury Winthrop Shaw Pittman to explore restructuring options, The Wall Street Journal reported, citing sources.
Nikola’s meteoric rise symbolized the market’s once-boundless optimism for clean energy transportation. Its stock soared to an unprecedented $1,977 per share in Jun. 2020, according to data from Benzinga Pro, as investors bought into founder Trevor Milton‘s vision of a zero-emission trucking future.
However, the dream began unraveling when short-seller Hindenburg Research exposed significant misrepresentations about the company’s technology capabilities in 2020.
Nikola did not immediately respond to Benzinga‘s request for comment.
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Why It Matters: The subsequent investigation led to Milton’s conviction on fraud charges in 2022 and a four-year prison sentence, dealing a devastating blow to the company’s reputation. Despite these setbacks, Nikola attempted to push forward, producing over 80 trucks – though at a staggering net loss of nearly $200 million in its latest quarter.
Now, with CFO Thomas Okray warning that cash reserves will only last until April 2025, the company’s fate hangs in the balance. A Nikola representative confirmed to Bloomberg that they are evaluating various options, including financial restructuring.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
