Nikola Motors Files for Chapter 11: End of an EV Era

Nikola Motors has filed for Chapter 11 bankruptcy protection, planning to sell its assets. Despite innovations in electric trucks, it faced challenges like leadership changes, funding difficulties, and safety concerns. With dwindling cash reserves, the company's market value collapsed from $27 billion in 2020 to less than $50 million.

On Wednesday, Nikola Motors filed for Chapter 11 bankruptcy protection, marking the latest setback in the electric vehicle sector. The company plans to sell its assets, seeking to navigate the hurdles of sluggish demand, high cash burn, and funding challenges.

Conceived as a pioneering EV startup during the pandemic, Nikola's journey mirrored that of peers like Fisker and Proterra, who also faced bankruptcy amid financial constraints and shifting market dynamics. CEO Steve Girsky acknowledged the market's severe impact on the operation, as other industry players felt pressure from high interest rates and waning demand.

Nikola, initially known for battery-powered trucks and later transitioning to hydrogen-electric vehicles, struggled with safety recalls and a skeptical market. The company's market capitalization has plummeted significantly, driven by high production costs and reluctance from fleet operators to adopt electric solutions amid economic uncertainty.

(With inputs from agencies.)