Embattled electric vehicle maker Nikola Corp. (NKLA) has filed for Chapter 11 bankruptcy amid declining sales and mounting financial losses.
The Arizona-based automotive start-up that was once a favorite stock of retail investors said it was forced to file for bankruptcy after failing to secure a buyer or raise additional funds to continue operations.
At its peak in 2020, Nikola had a $30 billion U.S. market capitalization and was briefly worth more than Ford Motor Co. (F).
However, it has been all down hill for the company in recent years after founder and former chairman Trevor Milton was convicted of wire fraud and securities fraud in 2022.
Milton was found guilty of misleading investors about Nikola’s operations and its zero-emissions technology.
Nikola’s main product is an all-electric semi-truck, which it began producing in 2022. However, to date, the company has only manufactured 600 of the vehicles.
Many of the electric vehicles Nikola has sold have been recalled due to defects, costing the automaker tens of millions of dollars and hastening its financial decline.
Nikola warned investors last autumn that the company only had enough cash to support its operations into the start of this year.
The company undertook a 1-for-30 reverse stock split last year to artificially prop-up its share price.
Even with the reverse stock split, Nikola’s share price has declined 96% over the last 12 months to trade at just $0.77 U.S. per share.
