Latest news with #SteveGirsky
Yahoo
21-02-2025
- Automotive
- Yahoo
This automaker files for Chapter 11 bankruptcy
Nikola, an EV startup once valued higher than Ford, has filed for Chapter 11 bankruptcy. In the wake of a high-profile scandal and a recall that rocked the company to its core, Nikola says it only has about $47 million in cash on hand. This is likely Nikola's last chapter (pun intended—sorry, not sorry), joining EV startups like Fisker and Lordstown Motors in bankruptcy. Given its tumult and headwinds, we're almost sure Nikola is dead and a statement, Nikola said the company and 'certain of its subsidiaries' have filed Chapter 11 petitions in Delaware and a motion to pursue auction and sale under Section 363 of the US Bankruptcy Code. Nikola has also filed motions to allow limited operations to continue while it pursues liquidation or sale. 'We have faced various market and macroeconomic factors that have impacted our ability to operate. In recent months, we have taken numerous actions to raise capital, reduce our liabilities, clean up our balance sheet, and preserve cash to sustain our operations," said Steve Girsky, President and CEO of Nikola. "Unfortunately, our very best efforts have not been enough to overcome these significant challenges, and the Board has determined that Chapter 11 represents the best possible path forward under the circumstances for the company and its stakeholders.' The company claims it has been pursuing acquisition for 'months' before settling on bankruptcy. If the courts approve Nikola's motions and petitions, those interested would be able to submit binding offers for Nikola's assets, which would be 'free and clear' of Nikola's incurred debt and certain liabilities. Shortly after the bankruptcy filing, Nikola's stock fell over 38 percent, and the company is now valued at less than $50 million. In 2020, Nikola's IPO valued it at more than $27 billion, making it more valuable than Ford at the time. Nikola founder Trevor Milton was sentenced to four years in prison in 2023 for defrauding investors after a 2022 conviction on two counts of wire fraud and one count of securities fraud. The charges were filed after Nikola was discovered lying about its semi truck being fully billed itself as a zero-emissions trucking company, claiming it had self-driving EV and hydroelectric trucks. It was among the first in the EV semi-truck segment, ahead of Tesla, with promises to revolutionize how we transport goods across the country. Its flashiest demonstration showed an electric semi, which Nikola suggested was fully self-driving. After the company's IPO, the now defunct short-selling firm Hindenburg Research published its findings, which ultimately proved the semi was not self-driving but just rolling down a hill. This discovery, along with the 2023 recall of all its vehicles due to safety concerns and the subsequent conviction of its founder, proved insurmountable for Nikola. Like Fisker, the world was in awe of Nikola until we learned its vehicles weren't what we were led to believe. 'Fake it 'till you make it' is only cool when you make something great. Nikola overpromised and never delivered. Unless it has critical intellectual property or perhaps some production machinery that a buyer would find useful, even liquidation may be a hard path for Nikola. Love reading Autoblog? Sign up for our weekly newsletter to get exclusive articles, insider insights, and the latest updates delivered right to your inbox. Click here to sign up now!
Yahoo
21-02-2025
- Automotive
- Yahoo
EV automaker Nikola files for Chapter 11 bankruptcy
Nikola, an EV startup once valued higher than Ford, has filed for Chapter 11 bankruptcy. In the wake of a high-profile scandal and a recall that rocked the company to its core, Nikola says it only has about $47 million in cash on hand. This is likely Nikola's last chapter (pun intended—sorry, not sorry), joining EV startups like Fisker and Lordstown Motors in bankruptcy. Given its tumult and headwinds, we're almost sure Nikola is dead and a statement, Nikola said the company and 'certain of its subsidiaries' have filed Chapter 11 petitions in Delaware and a motion to pursue auction and sale under Section 363 of the US Bankruptcy Code. Nikola has also filed motions to allow limited operations to continue while it pursues liquidation or sale. 'We have faced various market and macroeconomic factors that have impacted our ability to operate. In recent months, we have taken numerous actions to raise capital, reduce our liabilities, clean up our balance sheet, and preserve cash to sustain our operations," said Steve Girsky, President and CEO of Nikola. "Unfortunately, our very best efforts have not been enough to overcome these significant challenges, and the Board has determined that Chapter 11 represents the best possible path forward under the circumstances for the company and its stakeholders.' The company claims it has been pursuing acquisition for 'months' before settling on bankruptcy. If the courts approve Nikola's motions and petitions, those interested would be able to submit binding offers for Nikola's assets, which would be 'free and clear' of Nikola's incurred debt and certain liabilities. Shortly after the bankruptcy filing, Nikola's stock fell over 38 percent, and the company is now valued at less than $50 million. In 2020, Nikola's IPO valued it at more than $27 billion, making it more valuable than Ford at the time. Nikola founder Trevor Milton was sentenced to four years in prison in 2023 for defrauding investors after a 2022 conviction on two counts of wire fraud and one count of securities fraud. The charges were filed after Nikola was discovered lying about its semi truck being fully billed itself as a zero-emissions trucking company, claiming it had self-driving EV and hydroelectric trucks. It was among the first in the EV semi-truck segment, ahead of Tesla, with promises to revolutionize how we transport goods across the country. Its flashiest demonstration showed an electric semi, which Nikola suggested was fully self-driving. After the company's IPO, the now defunct short-selling firm Hindenburg Research published its findings, which ultimately proved the semi was not self-driving but just rolling down a hill. This discovery, along with the 2023 recall of all its vehicles due to safety concerns and the subsequent conviction of its founder, proved insurmountable for Nikola. Like Fisker, the world was in awe of Nikola until we learned its vehicles weren't what we were led to believe. 'Fake it 'till you make it' is only cool when you make something great. Nikola overpromised and never delivered. Unless it has critical intellectual property or perhaps some production machinery that a buyer would find useful, even liquidation may be a hard path for Nikola. Love reading Autoblog? Sign up for our weekly newsletter to get exclusive articles, insider insights, and the latest updates delivered right to your inbox. Click here to sign up now!
Yahoo
20-02-2025
- Automotive
- Yahoo
Here's Why Nikola Has Filed for Bankruptcy After Difficult Years
EV and FCEV truck startup Nikola Corp. files for Chapter 11 bankruptcy protection, seeking a sale of its assets after being unable to secure additional investments. At one point the truck startup had been valued at $30 billion, but it faced a series of challenges since the prosecution of its founder and CEO Trevor Milton. In recent years the startup focused on hydrogen fuel-cell truck technology, but revenues remained slim in an industry facing a slow climb toward zero-emission semis. Electric and hydrogen truck startup Nikola Corporation, which at one point had been valued at $30 billion, filed for Chapter 11 bankruptcy protection this week, seeking to auction off all of its assets and wind down its business in an orderly manner. Over the past few months Nikola had been searching for additional investors, shedding staff to stay afloat, and also trying to find a buyer to take over the company while continuing to build and develop ZEV Class 8 trucks. Nikola had been in talks with a potential, undisclosed buyer in late 2024, but those efforts failed to bear fruit. On the day of the bankruptcy filing Nikola had just $47 million in cash on hand, despite at one point being famously eclipsing the market cap of Ford. Like many other startups in the early production stages, it saw a quick rate of cash burn—and losses of hundreds of millions of dollars over the past several quarters. Late last summer the company had just under $200 million in cash, amid warnings that it might not be able to hold out past the first few months of 2025. "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, President and CEO of Nikola. "In recent months, we have taken numerous actions to raise capital, reduce our liabilities, clean up our balance sheet, and preserve cash to sustain our operations." When it comes to assets it could sell, the company's equipment and tooling at its main plant in Coolidge, Arizona, is seen as the main source of cash. Aside from issues related to the launch of production, Nikola also faced a skittish and poorly developed EV semi truck market, one that has only started to gain momentum in the past two years after a long period of obscurity, as well as an almost complete lack of public truck charging infrastructure. At one point the company had shown a rendering of a planned EV and FCEV pickup truck model, dubbed Badger, but the project was shelved as the hype over BEV trucks peaked and quickly subsided. The headwinds that Nikola faced over the past few years were hardly unique: Slow demand, high costs of components and manufacturing, difficulties finding investors, the rate of cash burn approaching the production stage, and competition from established truck makers. The company also saw quick turnover in its top ranks after its former CEO and founder Trevor Milton stepped down from the post and was charged with fraud in 2021 over past claims relating to the company's trucks. The accusations and later charges against Milton saw Nikola's stock drop by a significant margin and introduced other challenges, but did not immediately doom the company. Milton was found guilty and received a four-year prison sentence in late 2023, while the company also paid a $125 million civil penalty to the SEC. In 2023, the company recalled all of its battery-electric models after a series of fires that stemmed from a coolant leak in battery packs. At the time, the company had delivered just over 200 electric trucks to customers and dealers. After Milton stepped down in 2020, the company went through several CEOs, with Girsky, a former GM executive, having taken over the helm in August 2023 from Michael Lohscheller. Nikola attempted to shift its focus to hydrogen-electric trucks recently, launching its HYLA brand in the process. However, the company faced many of the same challenges in this sphere as with EV trucks. Despite recent collapses of other ZEV truck and van startups, in some ways it is surprising that Nikola lasted this long, all the way into 2025. "With the dedication of our employees and support from our partners, Nikola has taken significant steps to move zero-emissions transportation forward, including bringing the first commercially available Class 8 hydrogen fuel-cell electric trucks to market in North America and developing the HYLA hydrogen refueling highway, connecting Northern California to Southern California," Girsky added in announcing the bankruptcy filing by the company. The future for electric and hydrogen semis in the US remains quite uncertain, despite some modest momentum in the sales of battery-electric delivery vans. The biggest players in the EV truck market are not startups—and not even Tesla—but established truck makers like Volvo and Daimler, both of which have launched several electric models over the past 24 months. Hyundai and Toyota also are working in this space. Will we see many electric semitrucks by 2030, representing even 10% of the Class 8 market, or will this trend take longer? Please comment below.
The Independent
20-02-2025
- Automotive
- The Independent
Nikola went from $30bn EV hope to bankrupt penny stock in just five years – what went wrong?
'I don't care that they stole my idea... I care that they don't have any of their own'. So said Nikola Tesla, the famous engineer and inventor of the 18- and 1900s so associated with progress in the world of energy. Of course, his name is also notable for it being used as the brand of a particular electric vehicle production company in not that one, the other one. Nikola perhaps didn't steal any ideas, but they were certainly one of the businesses to ride the coattails of the originals, and now become one of several which have disappeared from the EV sphere, the stock market, indeed the entire world soon enough. And, while stealing ideas wasn't an issue, embellishing the ones they had was. A US-listed organisation which was valued at over $30bn (£23.8bn) under five years ago, Nikola yesterday filed for bankruptcy protection after having all-but run out of cash, accruing huge debts and producing far too few actual vehicles. Like others EV manufacturers, 'market and macroeconomic factors' impacted Nikola, said CEO Steve Girsky. With the company having promised thousands of vehicles when it floated, both battery-powered and hydrogen fuel cell powered, Nikola ultimately delivered fewer than 400 trucks last year. From being valued in the same range as Ford, shares sunk on Wednesday to below 50 cents. As far as stock market hype stories go, it's certainly a cautionary tale as well as a disappointing one. Internal and external problems alike Nikola now has a cash balance of just $47m, but debts of over $350m. The company has tried 'to raise capital, reduce our liabilities, clean up our balance sheet and preserve cash to sustain our operations,' but has been unable to do so, added Mr Girsky. A sell-down of assets and intellectual property remains its only course of action to preserve some value for creditors, then the company will effectively cease to be, beyond some support for trucks on the road. There are so many factors at play here it's impossible to pick out the one most to blame, but along with the EV market not growing as strongly as hoped, Nikola had its own internal issues. A report from short selling hedge fund Hindenburg Research accused Nikola of faking progress regarding their trucks and, ultimately, Nikola's founder Trevor Milton was arrested and has been sentenced to four years in prison, a decision that the FT notes remains under appeal. The company also paid out $125m (£99m) in 2021 to settle a case against it by the SEC, with the Guardian reporting Nikola did not admit any wrongdoing. In June 2020 the company floated on the Nasdaq exchange and on the third day of trading the share price surged over 100 per cent. Talk of billions of dollars worth of orders and expectation fuelled mega hype that this EV maker could challenge Tesla and others; instead it has lost 99.7 per cent of share price value over the past year. Wednesday's 39 per cent drop from what was already then a 99 per cent 12-month loss merely serves as a reminder that no matter how low shares go, there's always the possibility for another drop - or total wipeout. Future legacy Danni Hewson, head of financial analysis at AJ Bell, reasoned that in another political landscape there may have been a turnaround story, but instead they go the way of Fisker, Arrival and Lordstown Motors. 'For a time, Nikola was the poster child of EV usurpers. An investor favourite, it looked like the real deal and even vied with Ford for market cap. Buoyed by interest from General Motors, it was lapping other pandemic start-ups. But then came allegations of fraud which sowed more than a few seeds of doubt and most certainly played a part in GMs sudden lack of interest,' said Ms. Hewson. 'Whether the tarnished company could have turned things around if interest rates hadn't shot up and if EV take-up in the US had been as fulsome as had been predicted is for business students to weigh up in time, but with many of its pandemic cohort such as Lordstown Motors also hitting the skids it's clear it would have been a difficult job to do. 'What's also clear is that sentiment about EVs in the US was already shifting even before the return of Donald Trump to the White House, with many legacy automakers rolling back their electric dreams. The sheer scale of those long, winding highways means building the infrastructure needed to facilitate a large-scale EV revolution will be a hugely expensive task, and one that will require businesses and politicians to share in the determination to get the job done.' As for the long game in the EV battle, Ms Hewson notes that Nikola's IP 'could present an opportunity' in the future, for the work done so far particularly in the hydrogen trucks sphere. But a lack of commercial success there and the practical problems with putting infrastructure in place for widespread success means that remains very much a long-term dream, for now. It certainly didn't come soon enough for Nikola, or for those who invested in it. Another Nikola Tesla-attributed quote is: 'You may live to see man-made horrors beyond your comprehension.' While the fall of any particular business (probably) isn't quite what he had in mind, it might be the way the remaining Nikola shareholders are feeling these days.
USA Today
19-02-2025
- Automotive
- USA Today
Tesla rival Nikola files for Chapter 11 bankruptcy citing dire electric vehicle market
Hear this story Electric vehicle maker Nikola announced on Wednesday that the company filed for Chapter 11 bankruptcy and will pursue the sale of all its assets, citing monetary issues and a struggling and competitive market. A maker of commercial semi-trucks, Nikola is just the latest EV maker to file for bankruptcy joining Fisker, Proterra and Lordstown Motors for doing so recently, due to a challenging market marred by low demand in the U.S. and Europe. China has also made it harder for EV companies to remain afloat in the U.S. due to the country's companies' more affordable EVs. "Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate," Steve Girsky, president and CEO of Nikola, said in a news release. "In recent months, we have taken numerous actions to raise capital, reduce our liabilities, clean up our balance sheet and preserve cash to sustain our operations. Unfortunately, our very best efforts have not been enough to overcome these significant challenges." Even Tesla and its CEO Elon Musk reported an initial drop in annual sales in 2024 as borrowing costs, multiple recalls and a stagnant selection of EV vehicles hurt demand. Here is what to know about Nikola and the EV company's looming bankruptcy. Need a break? Play the USA TODAY Daily Crossword Puzzle. Volkswagen recall:Automaker recalls 32,000 VW, Audi vehicles for rear-view camera or battery issues What's next for Nikola? When Nikola voluntarily filed for bankruptcy, the company also filed motions with the court to "ensure its limited operations are able to continue," including meeting its obligations to employees during the sale process, according to the Phoenix, Arizona-headquartered EV maker. Additionally, the company said it will provide support operations for trucks in the field and some hydrogen-fueling operations through the end of March. As Nikola enters Chapter 11, the company said it has about $47 million in cash to fund remaining operations, go through the sale process and exit bankruptcy. Nikola, which originally made battery-powered semi-trucks before pivoting to electric trucks that use hydrogen, said it decided to initiate a structured sale process due to it representing "the best possible solution to maximize the value of its assets." Nikola's stock fell below $1 multiple times since 2020 Nikola increased production of its hydrogen-powered trucks in 2024, but this effort only resulted in the company losing hundreds of thousands of dollars on every vehicle sold as fleet operators remained reluctant to invest in an EV truck while borrowing costs rose, Reuters reported. Nikola stock fell about 46% by Wednesday midday to about 45 cents, valuing the company at less than $40 million. This drop comes after the EV maker's peak market capitalization of about $27 billion in 2020, when it was valued more than Ford Motor Co., according to Reuters. Since going public in 2020 through a merger with a blank-check company, Nikola's stock had fallen below the $1 mark on several occasions, prompting the company to execute a reverse stock split last year to comply with Nasdaq's listing rules. A stock split occurs when a company's board of directors decides to increase the company's number of outstanding shares by giving more shares to current shareholders. Nikola's founder and former CEO sentenced on fraud charges Nikola's leadership has come under question, particularly after its founder and then-CEO Trevor Milton was convicted of fraud in 2022 and sentenced to four years in prison the following year. Milton was the subject of a federal probe that was sparked by an investment fund that claimed Nikola misled the public about the company's progress, including the capability of its hydrogen semi-trucks and battery systems. Milton resigned from Nikola amid the federal investigation, saying in a statement: "Nikola is truly in my blood and always will be, and the focus should be on the Company and its world-changing mission, not me. So I made the difficult decision to approach the Board and volunteer to step aside as Executive Chairman." Hindenburg Research, an investment research firm, accused Nikola of committing "intricate fraud" and claimed Milton was making false statements about the company. In response, Nikola said the firm's claims were "designed to provide a false impression to investors and to negatively manipulate the market in order to financially benefit short sellers, including Hindenburg itself." Reuters contributed to this story.
