Electric vehicle startup Nikola filed for Chapter 11 bankruptcy protection yesterday following a dramatic decrease in sales, a fraud scandal, and the incarceration of its founder.
Launched in 2015, the company made promises to revolutionize the industry by developing long-haul semi-trucks powered by hydrogen and electricity. The zero-emissions pitch sparked enthusiasm among investors until 2020, when Nikola was targeted in a short-seller report alleging that founder Trevor Milton had exaggerated claims about his business’s technology and production (read report). Milton was ousted and later convicted of fraud in 2022 for misrepresenting Nikola to investors, including sharing a promo video of an electric truck rolling downhill. He received a four-year prison sentence, which he is now appealing.
The automaker reported having $47M in cash to fund its bankruptcy proceedings and provide limited service for trucks on the road. See 1440's overviews of electric vehicles and how bankruptcy works.
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