Nikola Motor, once valued at a staggering $30 billion and seen as a revolutionary player in the electric vehicle (EV) industry, has filed for Chapter 11 bankruptcy protection. The move comes after months of financial turmoil, with the company warning earlier this year that it was on the brink of running out of cash. Despite once surpassing the market capitalization of Ford Motor Co., Nikola is now left with only $47 million in cash reserves, struggling to sustain its operations.

The Rise and Fall of Nikola Motor

Founded in a Utah basement, Nikola Motor quickly gained attention as a potential industry disruptor. The Arizona-based company became a Wall Street favorite, attracting massive investments and media hype. However, its meteoric rise was followed by a dramatic downfall, largely fueled by fraud allegations.

In 2020, short-selling firm Hindenburg Research published a damning report accusing Nikola of fraudulent practices. The report triggered an investigation by the Securities and Exchange Commission (SEC), setting off a chain of events that led to the resignation and eventual conviction of the company's founder and CEO, Trevor Milton.

Trevor Milton was forced to step down after reports surfaced that he had misled investors about the company’s production capabilities. Nikola’s stock price plummeted as doubts over its technology grew. Milton was convicted in December 2023 and sentenced to four years in prison for making fraudulent claims about Nikola’s EV trucks. Prosecutors painted him as a “con man,” citing evidence that a promotional video showing a Nikola truck driving on a highway was actually staged—the vehicle was merely rolling downhill without power.

Further investigations revealed that Milton falsely presented a General Motors truck as Nikola’s own groundbreaking technology. The company’s current CEO later testified that Milton had a history of exaggeration when pitching the company’s future to investors.

Even after Milton’s departure, Nikola Motor continued to struggle with its business operations. The company’s EV truck production remained sluggish, with only 83 trucks produced in the third quarter of last year and a net loss of nearly $200 million. In the previous quarter, the company produced just 77 trucks while reporting a net loss of $134 million.

With losses piling up, Nikola formally filed for bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware. The company also submitted a motion seeking court approval to conduct an auction of its business assets.

What’s Next for Nikola?

Despite filing for bankruptcy, Nikola has stated that it intends to maintain limited support and service for its existing vehicles. Pending court approval, the company plans to continue minimal operations, including fueling services, through the end of March. However, Nikola has acknowledged that it will require additional funding to keep operations running beyond that point.

CEO Steve Girsky noted that broader economic conditions and EV market challenges have severely impacted Nikola’s ability to operate. “Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate,” Girsky stated.

Despite efforts to raise funds, cut costs, and reduce liabilities, the company’s financial troubles have proven too significant to overcome. “The Board has determined that Chapter 11 represents the best possible path forward under the circumstances,” Girsky added.

Nikola’s troubles extend beyond financial woes. The company previously paid $125 million in 2021 to settle a civil case with the SEC, although it did not admit wrongdoing. Meanwhile, the broader EV market has faced increasing headwinds, with slowing sales and political uncertainty. Former President Donald Trump has vowed to eliminate what he calls President Joe Biden’s “electric vehicle mandate,” adding to the uncertainty surrounding the industry.

For Nikola, the bankruptcy filing marks a stunning reversal of fortune. Once hailed as a leader in the EV revolution, the company now faces an uncertain future—one defined by legal battles, financial struggles, and a market that may be moving on without it.