Nikola, the struggling electric truck company, has filed for Chapter 11 bankruptcy protection, marking the end of a tumultuous journey marked by rapid cash burn, allegations of fraud, and the incarceration of its first CEO and founder.

The company announced that it would seek an auction and sale process, pending court approval, and has $47 million in cash on hand to fund its bankruptcy proceedings, implement the sale process, and exit Chapter 11. Nikola listed assets of between $500 million and $1 billion, and estimated its liabilities were between $1 billion and $10 billion, according to a court filing.

In a statement, Steve Girsky, President and CEO of Nikola, attributed the company's struggles to various market and macroeconomic factors that have impacted its ability to operate. Despite taking numerous actions to raise capital, reduce costs, and preserve cash, the company's efforts were not enough to overcome these challenges, leading the Board to determine that Chapter 11 represents the best possible path forward.

Nikola's rise and fall is a cautionary tale for the electric vehicle industry. Founded in 2015, the company aimed to transform the polluting heavy-truck industry into one based on zero emissions, using hydrogen fuel cell technology and later adding battery-electric trucks to its lineup. Nikola scored a major win in 2020 when General Motors announced plans to help engineer and manufacture its battery-electric and hydrogen fuel cell vehicles, including the Badger pickup truck, in exchange for an 11% equity stake in the startup.

However, less than a week later, a bombshell report by short-selling firm Hindenburg Research accused Nikola of fraud, including staging a video showing the truck rolling down a hill to simulate driving. The report led to the downfall of founder Trevor Milton, who stepped down as board chair and CEO and was eventually sentenced to four years in prison for falsely claiming to produce his own hydrogen fuels at below-market rates and obtaining billions of dollars' worth of committed truck orders.

Nikola went public in 2020 and started shipping its first trucks less than a year later. Despite ramping up production in 2024, the company was losing hundreds of thousands of dollars on every truck it sold. As of the third quarter of last year, Nikola had only produced 600 vehicles, many of which have been recalled due to defects, costing the automaker tens of millions of dollars.

Nikola is not the only high-profile EV company to fail to meet expectations. Other EV startups that have failed include Lordstown, Proterra, and Fisker. TuSimple, a self-driving truck company from China, pivoted to gaming tech. The bankruptcy filing marks a significant setback for the electric vehicle industry, which has been grappling with market and macroeconomic challenges.

The implications of Nikola's bankruptcy are far-reaching, with potential consequences for the entire EV industry. As the company goes through the auction and sale process, it remains to be seen what the future holds for Nikola's assets, employees, and stakeholders. One thing is certain, however: the electric vehicle industry will continue to face significant challenges in the coming years, and companies will need to adapt and innovate to survive.