Hydrogen-powered freight truck manufacturer Nikola has recently filed for Chapter 11 bankruptcy, signaling a challenging period for the electric vehicle (EV) maker. The company, renowned for its HYLA brand, has faced issues such as weak demand and financial pressures, leading to the decision to auction off its assets.
With approximately $47 million in cash, Nikola is seeking court approval to sell its assets and continue limited operations. The company plans to maintain certain services for its trucks and HYLA fuelling operations until March, after which it will rely on partners to continue these services.
Despite efforts to raise capital and reduce liabilities, Nikola’s Board determined that a structured sale process would be the best course of action to preserve the value of its assets. President and CEO Steve Girsky acknowledged the challenges faced by the company in the EV industry and expressed the need for Chapter 11 bankruptcy as the most viable option for Nikola and its stakeholders.
Legal counsel for Nikola includes Pillsbury Winthrop Shaw Pittman and Potter Anderson & Corroon, with Houlihan Lokey Capital as its investment banker and M3 Partners as its financial advisor. The proposed sale process aims to attract potential buyers interested in acquiring Nikola’s assets free of the company’s debts and certain liabilities.
In October, Nikola reported sales of 88 hydrogen-powered Class 8 electric trucks in the third quarter, bringing the total number of hydrogen fuel cell trucks wholesaled by the company to 200 for the first three quarters of 2024. The company has sold 235 units since the market launch of its trucks in the previous year.
Moving forward, Nikola is focused on maximizing asset value through the sale process while continuing to provide essential services to its customers. The company remains committed to innovation and sustainability in the EV industry, despite the challenges it currently faces.
