Electric vehicle manufacturer Nikola has filed for Chapter 11 bankruptcy protection after warning it might deplete its cash reserves early this year. Once a Wall Street sensation, Nikola faced scandals, including the 2022 conviction of founder Trevor Milton for misleading investors about the company’s technology. During Milton’s trial, it was revealed that a promotional video of a prototype truck showed a nonfunctional vehicle rolled downhill rather than driven. At its peak in 2020, Nikola’s valuation exceeded $30 billion, surpassing Ford Motor Co. The company filed in the U.S. Bankruptcy Court for Delaware and seeks court approval for an auction and sale. Nikola currently holds about $47 million in cash and plans to continue limited operations, including fueling services, through March, pending further funding. CEO Steve Girsky cited market challenges impacting operations despite recent efforts to raise funds and cut liabilities. In December 2023, Milton was sentenced to four years for fraud related to exaggerated claims about zero-emission trucks, leading to investor losses. Nikola settled a 2021 SEC civil case for $125 million without admitting wrongdoing. The EV sector faces headwinds amid slowing sales, with President Donald Trump pledging to revoke policies supporting EV adoption, including a 2030 sales target and a $7,500 tax credit. Nikola’s shares dropped over 49% pre-market on Wednesday. — news from The Associated Press
