The much-hyped electric vehicle maker plans to wind down its operations in bankruptcy

A Nikola truck at an industry fair in 2022. Photo: FABIAN BIMMER/REUTERS

By Bob Tita, Soma Biswas and Colin Kellaher – Updated Feb. 19, 2025 5:59 pm ET|WSJ Pro

Electric truck maker Nikola, which briefly boasted a market value above Ford Motor before its founder was charged with fraud, filed for bankruptcy after struggling with high costs and a trucking industry reluctant to abandon diesel engines.   

Nikola said it plans to wind down operations. Its rapid rise, with investors embracing the promise of environmentally friendly vehicles, was followed by a steep decline as the company stumbled trying to fulfill the lofty promises of its founder and former chief executive, Trevor Milton. 

Now a penny stock, Nikola filed for chapter 11 on Wednesday in a Wilmington, Del., court, joining other Tesla wannabees that have run out of road before their zero-emissions visions were realized. The Wall Street Journal reported earlier this month that Nikola was nearing a bankruptcy filing. 

“Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate,” said Steve Girsky, Nikola’s chief executive. “Unfortunately, our very best efforts have not been enough to overcome these significant challenges.”

Nikola rode a green-investment boom that has since cooled amid rising costs, slowing acceptance of zero-emissions products among consumers and a shifting political landscape. The growing pile of green auto companies that have wound up bankrupt also includes EV manufacturers Fisker, Lordstown Motors and Electric Last Mile Solutions. 

Those headwinds extend to Europe, where Swedish battery developer Northvolt recently went bankrupt.

Nikola said it wouldn’t be able on its own to provide certain service and support operations for its trucks in the field past the end of March. Girsky said in a court filing that Nikola has already stopped manufacturing new trucks to conserve cash ahead of the bankruptcy. 

The company reported in October it has made 235 hydrogen-electric trucks since production began in late 2023. 

Milton founded Nikola in his basement in 2015, among a series of ventures that combined his charm and salesmanship with emerging technologies. A self-described high school dropout who started out selling home alarm systems in Utah, Milton as far back as 2016 claimed to have built a fully functioning hydrogen-electric truck. 

He raised billions of dollars from major banks and manufacturers, including General Motors and Germany’s Bosch, as well as everyday investors. As companies and industries sought to brand themselves as environmentally sustainable, Nikola pitched hydrogen fuel cells as a revolution for heavy-duty trucks.

Hydrogen fuel cells harness a chemical reaction between hydrogen and oxygen to create electricity and power an electric motor. For long-distance trucking, the technology had advantages over battery-electric models: Trucks had a longer mileage range, could be refueled with hydrogen quickly and didn’t require heavy stacks of lithium ion batteries that reduced the cargo weight trucks could haul.

Nikola combined with a special-purpose acquisition company to go public in 2020. Enthusiasm for green-auto investments propelled its valuation to $30 billion, beyond Ford and Fiat Chrysler. 

Nikola that year reported orders for 14,000 of its heavy-duty trucks. Those were mostly nonbinding, and the company was still years away from being able to produce that many vehicles. 

In September 2020, short seller Hindenburg Research published a report describing the company as an “intricate fraud,” accusing Milton of overhyping Nikola’s capabilities and technology. The firm said Milton showed investors a promotional video of a Nikola truck prototype gliding downhill with an actor hired to play the driver, and no powertrain to propel it. Milton left Nikola later the same month.

The first hydrogen truck prototype the company unveiled at a public event was an empty cab with the words “H2 zero emissions hydrogen electric” stenciled onto it but with nothing underneath, one of the company’s engineers later told the Journal.

The company’s shares plunged following the Hindenburg report, and in 2021 federal prosecutors charged Milton with securities fraud. They alleged he lied about nearly every aspect of Nikola’s business, including claims that Nikola built its Badger electric pickup truck from the ground up and had produced hydrogen at below-market prices.

Milton was convicted in 2022 and given a four-year prison sentence, which he is appealing. 

He remains defiant. “I saw the Nikola bankruptcy from a mile away,” Milton said in an Instagram post Wednesday. “When I left the company I left them almost $1 billion in cash.” 

Industry analysts said Nikola’s bankruptcy was ultimately caused by the company’s inability to bring down the cost of its trucks and provide fuel to support them. Limited hydrogen availability dogged the company as it pitched its vehicles to trucking companies, and its original goal of establishing networks of hydrogen filling stations along interstate highways never materialized. 

“How do you expect somebody to adopt that truck if there wasn’t a practical way to fuel it?” said Ann Rundle, vice president for electrification and autonomy for truck market forecaster ACT Research.

Girsky on Wednesday cited a shortage of parts in the nascent hydrogen fuel-cell market that slowed production. Analysts said Nikola’s low production volumes kept it from being able to drive down costs for its trucks, which were nearly three times the cost of heavy-duty diesel trucks. The company said it has lost $3.6 billion in capital invested in the company since its inception, according to its filing.

Nikola stockholders could now see a total loss on their investment. The company enters chapter 11 owing $97.7 million in convertible notes and lease obligations, plus other trade debts that would need to be paid before stockholders could receive anything. Nikola shares closed at a nominal 47 cents on Wednesday.

Girsky said that litigation against Nikola, largely over alleged misrepresentations to investors, has also drained cash. That includes roughly $80 million still owed to the Securities and Exchange Commission under a $125 million securities-fraud settlement from 2021.

A court later found that Milton was responsible for nearly all of the liability stemming from the SEC investigation and ordered him to pay $165 million to Nikola. Milton accused the company of blaming him for its own incompetence and bad decisions.

Just before filing for chapter 11, Nikola agreed to hand over the arbitration award to settle a private shareholder lawsuit, court papers show.

Write to Bob Tita at robert.tita@wsj.com, Soma Biswas at soma.biswas@wsj.com and Colin Kellaher at colin.kellaher@wsj.com

Appeared in the February 20, 2025, print edition as ‘Nikola, Once a Darling of Green Investment, Files for Bankruptcy’.