Nikola Finally Files For Chapter 11 To Try To Wind Down Smoothly
While I have no interest in celebrating the demise of a company, one in which very real people had and have jobs that are going to go away, this was also a long time coming. The five year story about how EV trucking company Nikola ended in bankruptcy started in spectacular fashion in 2020, when it was discovered that an official video the company put out in order to keep and lure in additional investors, one in which the Nikola One was said to be fully functional", was doctored in the most hilarious manner. As in, the truck was towed to the top of a hill and then allowed to roll down it, while the camera filming it all was tilted to make it look like the truck was powering itself along a flat highway.
While that is objectively hilarious in the most conman-ish manner, nobody was laughing when Nikola's contract with General Motors evaporated, nor when the company apparently thought the best method for combatting this PR nightmare was to try to silence critics using copyright law. And while the company both ousted CEO Trevor Milton and defended the video, stating that investors knew the capabilities of the truck at the time it was posted and tried to play word games with the company's description of the truck's capabilities, the government opened several investigations into the company and Milton got four years in the clink for securities and wire fraud.
Experts gave the company a 1 in 5 chance at survival. Nikola failed to beat those odds, however, and has filed for Chapter 11 bankruptcy.
Nikola said it decided to initiate a sale process of its assets to maximize value and ensure an orderly wind down. The firm will continue some operations for trucks in field and some hydrogen-fueling operations through the end of March. The company listed assets of between $500 million and $1 billion, and estimated its liabilities were between $1 billion and $10 billion, according to a court filing.
What's somewhat interesting here is that, while the Nikola One debacle was an obvious fraudulent flop, the company did actually produce a running truck, the Nikola Two. The tech isn't perfect, with reports that the battery-operated semi has a range of roughly 900 miles maximum, but it's not nothing. There was the potential for a successful product here.
Which will make it interesting to see who scoops up these assets at auction. Perhaps someone or some company that hasn't so brutally nuked its reputation by actually being truthful and transparent that they can flip all of this into an actual marketable product.