EV grifter Nikola files for bankruptcy
On Wednesday, electric vehicle maker Nikola filed for Chapter 11 bankruptcy protection and said it plans to “wind down operations.” The company is also seeking approval to hold an auction and sell the business. Good luck to whatever company picks up this lemon.
The company had big dreams of manufacturing hydrogen fuel cell vehicles suitable for long-haul, heavy-duty shipping. The Wall Street Journal reports:
Hydrogen fuel cells harness a chemical reaction between hydrogen and oxygen to create electricity and power an electric motor. For long-distance trucking, the technology had advantages over battery-electric models: Trucks had a longer mileage range, could be refueled with hydrogen quickly and didn’t require heavy stacks of lithium ion batteries that reduced the cargo weight trucks could haul.
Nikola combined with a special-purpose acquisition company to go public in 2020. Enthusiasm for green-auto investments propelled its valuation to $30 billion, beyond Ford and Fiat Chrysler.
Nikola that year reported orders for 14,000 of its heavy-duty trucks. Those were mostly nonbinding, and the company was still years away from being able to produce that many vehicles.
Readers may recall a 2018 promotional video that showed the Nikola One EV semi-truck driving along a two-lane desert highway. In fact, the truck was towed to the top of a shallow hill and rolled down. A company press release later claimed that it “never stated its truck was driving under its own propulsion in the video.” Nikola’s founder and former chief executive was convicted in 2022 for securities fraud and “misleading investors about the Arizona company’s technology.”
A 2018 Nikola video showed the Nikola One prototype rolling down a shallow hill in Utah. Nikola now says it never claimed the truck was driving under its own power. Credit: Arstechnica, Nikola (original video no longer avilable).
The company has made “235 hydrogen-electric trucks since production began in late 2023.” In 2023, the company had to recall all 209 battery-electric semitrucks it had made in order to repair “a potential flaw in their battery packs,” after a fire destroyed five trucks at the company’s headquarters. The company expects it will be unable to “provide certain service and support operations for its trucks in the field past the end of March” and has already stopped manufacturing to conserve cash ahead of the filing.
Nikola’s trucks were nearly three times the cost of heavy-duty diesel trucks, and that doesn’t include fuel costs. Adopting hydrogen trucks is risky for trucking companies when there is limited availability of fuel. Hydrogen is also significantly more expensive than gasoline, diesel, and electricity even when available.
The company has lost $3.6 billion in capital since its inception. A Nikola press release from 2023 brags that it received $58.2 million in government grants to support its hydrogen refueling stations along California freight corridors, with several million-dollar grants awarded by the Department of Energy for hydrogen cell research.
Nikola joins Fisker, Lordstown Motors and Electric Last Mile Solutions in the EV bankruptcy graveyard.