Nikola Corp., the hydrogen electric trucking startup once valued at $30 billion, has filed for Chapter 11 bankruptcy protection after failing to find a buyer or secure additional funds to maintain operations. The company's assets will be put up for auction, pending court approval, according to a regulatory filing.

The bankruptcy filing marks a significant downfall for Nikola, which was once considered a Silicon Valley darling after going public through a special purpose acquisition merger in 2020. However, a series of scandals surrounding its founder and former CEO Trevor Milton put the company into a tailspin. Milton was accused of fraud for making exaggerated claims about the company's electric truck technology and was convicted of wire and securities fraud in 2022.

In recent months, Nikola has taken steps to raise capital, reduce liabilities, and preserve cash to sustain operations. Despite these efforts, the company's CEO, Steve Girsky, stated that the Board has determined that Chapter 11 represents the best possible path forward under the circumstances for the company and its stakeholders. Nikola has about $47 million in cash on hand to fund its bankruptcy process.

The proposed bidding process would allow interested parties to submit binding offers to acquire Nikola's assets, independent of the company's debt or liabilities. These assets include Nikola's Class 8 hydrogen fuel cell electric trucks and battery electric truck platforms, as well as its HYLA hydrogen refueling highway project in California.

Nikola's bankruptcy filing is the culmination of a years-long unraveling, which began when Milton was accused of fraud. A report from short-seller Hindenburg Research called the company a fraud, and Milton stepped down in September 2020. The company ultimately paid a $125 million penalty in a settlement with the U.S. Securities and Exchange Commission, resulting in serious losses for investors.

In an attempt to raise capital, Nikola attempted to raise $100 million in a common stock sale in December 2024 to repay its debts and raise equity. However, the company only had enough cash to support its business into Q1 2025, and its stock collapsed as a result.

The bankruptcy filing raises questions about the future of the electric vehicle industry, particularly in the context of market and macroeconomic challenges. As 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." The fate of Nikola's assets and the impact on its stakeholders remain to be seen.

The story of Nikola Corp. serves as a cautionary tale for startups and entrepreneurs, highlighting the importance of transparency, accountability, and responsible business practices. As the electric vehicle industry continues to evolve, the bankruptcy of Nikola Corp. will likely have significant implications for the market and its players.