Troubled electric vehicle maker Nikola files for bankruptcy protection

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Troubled electric vehicle maker Nikola files for bankruptcy protection

2025-02-20 01:43 Last Updated At：01:51

Troubled electric vehicle maker Nikola has filed for Chapter 11 bankruptcy protection months after saying that it would likely run out of cash early this year.

Nikola was a hot start-up and rising star on Wall Street before becoming enmeshed in scandal and its founder was convicted in 2022 for misleading investors about the Arizona company's technology.

At the trial of founder Trevor Milton, prosecutors say a company video of a prototype truck appearing to be driven down a desert highway was actually a video of a nonfunctioning Nikola that had been rolled down a hill.

But the hype around the company was immense. In 2020, Nikola was valued at around $30 billion, exceeding the market capitalization of Ford Motor Co.

The company has had difficulty scaling its business, which mostly focused on EV trucks. In the third quarter, Nikola produced 83 trucks but recorded a net loss of almost $200 million. It produced 77 trucks in the second quarter, with a net loss of nearly $134 million.

Nikola filed for protection in the United States Bankruptcy Court for the District of Delaware and said Wednesday that it has also filed a motion seeking approval to pursue an auction and sale of the business.

The company has about $47 million in cash on hand.

Nikola Corp. plans to to continue limited service and support operations for vehicles on the road, including fueling operations through the end of March, subject to court approval. The company said that it will need to raise more funding to support those types of activities after that time.

“Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate,” CEO Steve Girsky said in a statement.

The executive said the company has made efforts in recent months to raise funds and reduce liabilities and preserve cash, but that it hasn't been enough.

"The Board has determined that Chapter 11 represents the best possible path forward under the circumstances,” Girsky said.

In December 2023 founder Trevor Milton was sentenced to four years in prison after being convicted of exaggerating claims about his company’s production of zero-emission 18-wheel trucks, leading to sizeable losses for investors.

Milton was convicted of fraud charges, portrayed by prosecutors as a con man six years after he had founded the company in a basement in Utah.

Prosecutors said Milton falsely claimed to have built its own revolutionary truck that was actually a General Motors product with Nikola’s logo stamped onto it.

Called as a government witness, Nikola’s CEO testified that Milton “was prone to exaggeration” when pitching his venture to investors.

Milton resigned in 2020 amid reports of fraud that sent Nikola’s stock prices into a tailspin. Investors suffered heavy losses as reports questioned Milton’s claims that the company had already produced zero-emission 18-wheel trucks.

The company paid $125 million in 2021 to settle a civil case against it by the SEC. Nikola didn’t admit any wrongdoing.

Aside from its personal troubles, Nikola has also had to contend with a more perilous environment for EV makers as sales slow. President Donald Trump has promised to eliminate what he incorrectly calls President Joe Biden’s “electric vehicle mandate.”

What that means in practice is that his executive order will revoke a non-binding goal set by Biden to have EVs make up half of new cars sold by 2030. He will also likely seek repeal of a $7,500 tax credit for new EV purchases approved by Congress as part of Biden’s landmark 2022 climate law, the Inflation Reduction Act.

Shares of Nikola, based in Phoenix, Arizona, fell below $2 late last year and tumbled another 40% Wednesday.

Trump issues fiery new threat against Iran as details of US aviator's rescue emerge

TEHRAN, Iran (AP) — U.S. President Donald Trump on Sunday made expletive-laden new threats to escalate strikes on Iran and its infrastructure if it doesn't open the Strait of Hormuz by his deadline, after American forces rescued an aviator whose Iran-downed plane fell behind enemy lines.

A defiant Iran struck infrastructure targets in neighboring Gulf Arab countries, challenged the U.S. account of the rescue and threatened to restrict another heavily used waterway in the region, the Bab el-Mandeb Strait off the Arabian Peninsula.

In a social media post, Trump vowed to hit Iran’s power plants and bridges and said the country would be “living in Hell” if the Strait of Hormuz, crucial for global trade, isn’t opened by Tuesday. He ended with “Praise be to Allah.”

Trump has issued such deadlines before but extended them when mediators have claimed progress toward ending the war, which has killed thousands, shaken global markets and spiked fuel prices in just over five weeks.

“It seems Trump has become a phenomenon that neither Iranians nor Americans are able to fully analyze,” Iranian Culture Minister Sayed Reza Salihi-Amiri told visiting Associated Press journalists in an interview in Tehran, adding that the president “constantly shifts between contradictory positions.”

Both sides have threatened and hit civilian targets like oil fields and desalination plants critical for drinking water. Iran’s U.N. mission called Trump’s threat “clear evidence of intent to commit war crime.”

Iran’s military joint command warned of stepped-up attacks on regional oil and civilian infrastructure if the U.S. and Israel attack such targets there, according to state television.

The laws of armed conflict allow attacks on civilian infrastructure only if the military advantage outweighs the civilian harm, legal scholars say. It’s considered a high bar to clear, and causing excessive suffering to civilians can constitute a war crime.

An intense search followed Friday's crash of the F-15E Strike Eagle, while Iran promised a reward for the “enemy pilot.” It was the first known American aircraft to crash in Iranian territory since the U.S. and Israel launched the war on Feb. 28.

Trump said that the service member was “seriously wounded and really brave” and rescued from “deep inside the mountains" in an operation involving dozens of armed aircraft. He said a second crew member was rescued in “broad daylight” within hours of the crash.

A senior U.S. administration official said that prior to locating the pilot, the CIA spread word inside Iran that U.S. forces had found him and were moving him for exfiltration, confusing Iranian officials. The official spoke on the condition of anonymity to discuss details not yet made public.

Iran also shot down another U.S. military plane, demonstrating both the perils of the bombing campaign and the ability of Iran's degraded military to hit back. Neither the status of the A-10 attack aircraft's crew nor where it crashed is known.

On Sunday, Iran’s state television aired a video showing what it claimed were parts of U.S. aircraft — a transport plane and two helicopters — shot down by Iranian forces during the rescue operation.

However, a regional intelligence official briefed on the mission told the AP that the U.S. military blew up two transport planes because of a technical malfunction and brought in additional aircraft to complete the rescue. The official spoke on condition of anonymity to discuss the covert mission.

Two Black Hawk helicopters were hit but navigated to safe airspace, according to a person familiar with the situation who spoke on condition of anonymity to discuss the sensitive information.

Trump's deadline centers on growing alarm over Iran's grip on the Strait of Hormuz, critical for shipments of oil and gas from the Persian Gulf to Europe and Asia as well as humanitarian supplies. Some ships have paid Iran for passage.

An Iranian presidential spokesperson, Seyyed Mohammad Mehdi Tabatabaei, said on social media that the strait can reopen only if some transit revenues compensate Iran for war damages.

A top Iranian adviser, Ali Akbar Velayati, warned on social media that Tehran also could disrupt trade on the Bab el-Mandeb, a key waterway to and from the Suez Canal.

Diplomatic efforts continued. Oman's Foreign Ministry said that deputy foreign ministers and experts from Iran and Oman met to discuss proposals to ensure “smooth transit” through the strait. Oman has often served as a mediator between the U.S. and Iran.

Egypt said that Foreign Minister Badr Abdelatty had spoken with U.S. envoy Steve Witkoff and Iranian Foreign Minister Abbas Araghchi, and with Turkish and Pakistani counterparts. Russia said that Araghchi also spoke with Russian Foreign Minister Sergey Lavrov.

In the United Arab Emirates, authorities said that four people — one Nepali and three Pakistani — were hurt in fires caused by debris from the interception of an Iranian projectile at Khor Fakkan port, and intercepted debris caused fires at a petrochemical plant in Ruwais, halting operations.

In Kuwait, Iranian drone attacks caused significant damage to power plants and a petrochemical plant. They also put a water desalination station out of service, according to the Ministry of Electricity.

In Bahrain, a drone attack caused a fire at one of the national oil company’s storage facilities and a state-run petrochemical plant, the kingdom’s official news agency said.

In Israel, rescue authorities said that they were searching for three people in the northern city of Haifa after an apartment building was hit. It wasn't immediately clear what struck it.

Meanwhile, more than 1,900 people have been killed in Iran since the war began.

In Gulf Arab states and the occupied West Bank, more than two dozen people have died, while 19 have been reported dead in Israel and 13 U.S. service members have been killed. In Lebanon, more than 1,400 people have been killed and more than 1 million people have been displaced. Eleven Israeli soldiers have died there.

Bassem Mroue reported from Tehran, Iran, Sam Metz from Jerusalem and Samy Magdy from Cairo. Jon Gambrell in Dubai, United Arab Emirates; Lisa Mascaro and Seung Min Kim in Washington; Munir Ahmed in Islamabad; and Farnoush Amiri in New York; contributed to this report.