Nikola Corp. ( NKLA)—once a Wall Street darling valued at over $30 billion—has filed for bankruptcy protection, ending years of struggle as the company failed to secure a buyer or raise new capital.
At one point, the Phoenix-based electric and hydrogen truck maker, which went public via SPAC in 2020, was worth more than Ford Motor Company (NYSE: F) and had a multibillion-dollar deal with General Motors (NYSE: GM).
A series of scandals, production failures, and financial struggles, however, ultimately led to its downfall.
From market darling to collapse
At its peak, Nikola was considered a pioneer in zero-emission trucking, but its credibility unraveled after short-seller Hindenburg Research exposed misleading claims by founder and former CEO Trevor Milton.
Milton, who was convicted of wire fraud and securities fraud in 2022, had falsely promoted Nikola’s hydrogen technology and showcased prototypes that were non-functional.
Even after Milton’s departure, Nikola struggled to scale production. The company had only built 600 electric and fuel cell trucks since starting production in 2022, many of which were recalled due to defects, costing the company tens of millions of dollars.
By late 2023, Nikola’s capital reserves were nearly depleted, with just $198 million in cash at the end of the third quarter. CEO Steve Girsky, a former GM executive, warned that Nikola had enough liquidity to survive into early 2025 but not beyond.
“This filing was inevitable,” said Dan Ives, managing director at Wedbush Securities. “Nikola was one of the biggest examples of EV hype getting ahead of reality, and when capital dried up, there was simply no business left to sustain.”
The broader SPAC-fueled EV bust
Nikola was one of several EV startups that went public through SPAC mergers in 2020 and 2021—many of which have since collapsed or struggled. Other SPAC-backed failures include Lordstown Motors and Electric Last Mile Solutions, both of which also filed for bankruptcy.
“The SPAC-era EV bubble has fully burst,” said Garrett Nelson, senior equity analyst at CFRA Research. “These companies were valued on ambitions, not execution, and in an environment where capital was free-flowing. That world is gone now.”
Nikola’s stock has been in freefall for years, with shares trading below $2 since December 2023. The company executed a 1-for-30 reverse stock split last year to maintain its Nasdaq listing, but even factoring that in, Nikola’s all-time high was nearly $80 in June 2020.
Looking ahead, analysts see little hope for Nikola’s stock or a meaningful recovery.
“This is the end of the road,” said John Murphy, auto analyst at Bank of America. “There is no real asset value left in Nikola that would attract institutional investors at this stage.”
As the EV sector consolidates, Nikola’s demise serves as a cautionary tale for speculative investments in unproven technologies—and a reminder that not every startup survives in a competitive, capital-intensive industry.