Nikola seeks financial help amid bankruptcy rumors

The future seems bleak for Nikola Motors as reports suggest the company is exploring a potential sale or partnership to secure the funds needed to survive. The once high-flying electric truck maker has seen its stock plummet to a historic low, with its valuation dropping from $26 billion in 2020 to a mere $74 million. Nikola’s financial woes stem from the significant capital required to sustain its operations, estimated at around $500 million annually.

The company’s struggle for survival has been marked by a series of challenges, including layoffs, stock splits, short-seller reports, and legal issues. Nikola’s troubles began shortly after it went public in 2020, with allegations of fraud against founder Trevor Milton leading to his resignation and subsequent legal troubles. Despite efforts to secure funding through a special purpose acquisition company and arbitration proceedings, Nikola’s financial situation remains precarious.

In a bid to address its cash flow problems, Nikola has implemented various measures, including the sale and leaseback of its facilities and a shift from manufacturing battery-electric trucks to focusing on fuel cell electric vehicles. While the company previously produced its own batteries through Romeo Power, it later sold the business, leading to lawsuits from startups and further financial complications. Additionally, Nikola has relied on partnerships with suppliers like Iveco, Bosch, and Proterra to source key components for its vehicles.

Recent layoffs in October and December of 2024 were part of Nikola’s efforts to extend its financial runway and reduce operating costs. These workforce reductions have helped offset some of the financial pressures facing the company, but Nikola continues to face uncertainty as it seeks potential buyers or investors. Mullen Automotive’s acquisition of battery line equipment from Nikola for its operations in California is just one example of how the company may look to monetize its assets to stay afloat.

As Nikola navigates its financial challenges and considers its options for the future, the company’s ability to secure additional funding will be critical to its survival. Whether through a strategic partnership, asset sale, or other financial lifeline, Nikola’s fate remains uncertain as it strives to overcome its current financial difficulties and regain its footing in the electric truck market.