Shares of Nikola Corporation (NASDAQ: NKLA) plunged about 50% in pre-market trading Wednesday after the electric truck manufacturer filed for Chapter 11 bankruptcy protection. The move comes as the company struggles with mounting financial challenges, including rapid cash burn and difficulties raising additional capital amid uncertain demand for its hydrogen and battery-powered rigs.
The bankruptcy filing marks a major setback for Nikola, ending a turbulent period marked by frequent leadership changes, disappointing electric truck sales, and a dramatic decline in stock value.
According to court documents, Nikola listed assets between $500 million and $1 billion, while estimating its liabilities to be between $1 billion and $10 billion.
Founded over a decade ago, Nikola (NASDAQ: NKLA) went public in June 2020 and delivered its first vehicle in December 2021.
The company ramped up its hydrogen-powered fuel-cell electric truck production in 2024. However, it struggled to secure the necessary funding, with its cash reserves rapidly depleting as it continued to lose hundreds of thousands of dollars on each vehicle sold.
Nikola has also struggled to attract fleet operators, who have been reluctant to invest in electric truck infrastructure, including charging stations. High interest rates have made it even harder for companies like Nikola to operate amid tightening budgets.
Price Action: As of pre-market trading, Nikola stock was down 47.38%, trading at $0.4021.
