DETROIT — Nikola Corp., the auto startup once a favorite of Wall Street analysts and retail investors, has filed for Chapter 11 bankruptcy protection after failing to find a buyer or raise additional funds to stay afloat.

Nikola said Wednesday it plans to initiate an asset auction and sale process, pending court approval. The company said it has about $47 million in cash to fund bankruptcy activities, conduct the sale process and exit Chapter 11.

“Like other companies in the electric vehicle industry, we are facing a variety of market and macroeconomic factors that have impacted our ability to operate,” Nikola CEO Steve Girsky said in a press release. “Unfortunately, our best efforts have not been sufficient to overcome these significant challenges, and the board has determined that Chapter 11 represents the best path forward for the company and its stakeholders under these circumstances.”

If approved by the court, the proposed bidding process would allow interested parties to submit binding offers to acquire Nikola’s assets free of its debts and certain liabilities.

The bankruptcy filing marks the end of a years-long decline for the Phoenix-based company. At its peak in 2020, Nikola’s valuation surpassed Ford’s $30 billion deal with General Motors, which was considered the pinnacle of auto startups going public through reverse mergers and special purpose acquisition companies.

The company’s decline has been years in the making, sparked by scandals and lies by its founder and former chairman and CEO Trevor Milton. The fluent, energetic and disgraced executive was convicted of wire fraud and securities fraud in 2022 for misleading investors about Nikola’s operations and zero-emission technology.

The controversies were first publicly disclosed by short-seller Hindenburg Research after GM struck a deal with the Detroit automaker that included a $2 billion stake in the startup.

Nikola’s core products are all-electric and fuel cell electric semi-trailer trucks, which the company began producing in 2022. As of the third quarter of last year, the company had produced only 600 of these vehicles since then. Many of those vehicles have been recalled for defects, costing the automaker tens of millions of dollars.

Since transitioning from chairman to CEO in 2023, Girsky has pushed Nikola forward, including producing zero-emission trucks, but the company has been running on less capital.

Nikola warned investors on its third-quarter conference call that it has enough cash to sustain its business through the first quarter of 2025, but not much longer. Nikola reported a cash balance of $198 million at the end of the third quarter.
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