Nikola, the Electric Truck Company Dreaming of Becoming the Next Tesla, Files for Bankruptcy Protection

Company’s Rise and Fall: From Wall Street Success to Legal Troubles and Financial Losses

Nikola, a hydrogen-powered electric truck manufacturer that once dreamed of becoming the next Tesla, is on the verge of filing for bankruptcy protection. The company, which made a high-profile debut on the New York Stock Exchange in 2020, initially gained significant attention by briefly surpassing Ford’s market capitalization. However, the excitement quickly faded as the company faced a series of challenges, including fraudulent behavior by its CEO, Trevor Milton, and disappointing financial results. These issues have now led to an imminent bankruptcy filing, with significant implications for the broader electric vehicle (EV) industry, which has already been grappling with reduced investment interest under the Trump administration.

According to the Wall Street Journal, Nikola is expected to file for bankruptcy protection soon, citing anonymous sources familiar with the situation. The company has reportedly been working with legal advisors to explore options for restructuring, including the sale of its shares and other financial measures.

Nikola's early years as a public company were filled with promise. After its IPO in 2020, Nikola’s stock price soared, and at one point, its market capitalization exceeded that of Ford, a traditional auto giant. However, the company’s fortunes took a dramatic turn for the worse when allegations of fraud surfaced against its founder and CEO, Trevor Milton. The turning point came when the hedge fund Hindenburg Research accused Nikola of fabricating videos that depicted its trucks as functioning prototypes, which were, in fact, incomplete. The videos showed trucks rolling down a hill to create the illusion of movement, despite lacking critical components like fuel cells and hydrogen gas storage tanks.

The fraud allegations triggered investigations by both the U.S. Securities and Exchange Commission (SEC) and federal authorities. Eventually, Milton was convicted of securities fraud and sentenced to four years in prison for deceiving investors. The company’s credibility was severely damaged, and it struggled to regain its former momentum.

Financially, Nikola has faced continued setbacks. According to Bloomberg’s report, the company produced only about 80 hydrogen-powered electric trucks in the third quarter of last year, while incurring a staggering $200 million in net losses. As of now, Nikola’s stock price has plummeted to just 75 cents per share, rendering it nearly worthless.

The imminent bankruptcy filing marks the end of a once-promising venture that aimed to revolutionize the electric truck industry. The failure of Nikola has broader implications for the electric vehicle sector, particularly for investor confidence in U.S. electric car manufacturers like Tesla. With Tesla and other EV companies already facing a tough market environment under the Trump administration, the collapse of Nikola is expected to further dampen investor sentiment toward the electric vehicle industry.

As Nikola’s bankruptcy becomes a reality, the EV market will need to adapt to these new challenges. The rise and fall of this ambitious startup serve as a stark reminder of the volatility and risks associated with the emerging electric vehicle sector. While Tesla continues to lead the charge in electric vehicle innovation, Nikola’s fall highlights the difficulties that even the most promising electric truck manufacturers can face in a highly competitive market.