Pending court approval it will have limited operations, including fueling operations, through the end of March. However, the company acknowledged it will need additional funding to sustain operations at some point.
CEO Steve Girsky stated, “Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate.”
He also mentioned that despite efforts to raise funds, reduce liabilities, and conserve cash, the measures have not been enough.
“The Board has determined that Chapter 11 represents the best possible path forward under the circumstances,” Girsky said.
Legal and Market Challenges
Nikola’s financial and legal woes are not its only challenges. The company previously paid $125 million in 2021 to settle a civil case with the SEC, though it did not admit any wrongdoing.
The overall EV market has also become increasingly difficult for manufacturers. Sales have slowed, and the industry faces uncertainty as President Donald Trump has vowed to eliminate what he calls President Joe Biden’s “electric vehicle mandate.”
