Electric and hydrogen truck manufacturer Nikola Corp. has filed for bankruptcy protection in Delaware, citing a massive battery recall and mounting financial losses. The struggling automaker listed roughly $98 million in funded debt and admitted its dire cash shortage left no path forward outside of an asset sale.
Battery Recall Sparks Financial Meltdown
Nikola’s troubles escalated after it voluntarily recalled all battery-powered trucks it had sold, following a series of fires caused by faulty coolant systems. The recall, initiated in the third quarter of 2023, resulted in $44 million in losses and triggered a shareholder class action lawsuit in Arizona federal court. Investors accused Nikola and its executives of misleading the public about the safety of its vehicles.
“With no sufficient cash to fund operations and no viable way to raise those funds, the company’s board concluded that an orderly sale process is the best option to maximize asset value and return for creditors,” CEO Stephen J. Girsky stated in court filings.
