The electric vehicle industry has seen its share of ambitious startups rise and fall in recent years.
Some have struggled to secure funding, while others have been plagued by scandals or production setbacks.
As competition intensifies and financial pressures mount, companies without strong financial backing find it increasingly difficult to stay afloat.
Need Urgent Funding
Nikola Motors, once seen as a promising player in the electric truck market, is now facing the possibility of bankruptcy.
The company is reportedly in urgent need of funding, with nearly 1,000 jobs at risk. According to Boosted, Nikola is closer to insolvency than ever before.
The company has been in turmoil for years. In 2021, its founder and former CEO, Trevor Milton, was convicted of fraud and sentenced to three years in prison.
Despite this, Nikola managed to survive, continuing to develop and produce hydrogen and electric trucks.
Now, with its financial reserves nearly depleted, the company is exploring options to secure capital, including selling off parts of the business.
Nikola's stock has seen a dramatic decline, losing 95 percent of its value over the past year.
In an attempt to reassure investors, current CEO Steve Girsky stated in October that the company was in discussions with potential partners.
So far, these talks have not resulted in a concrete rescue plan.
The company's leadership previously indicated that it had enough resources to continue operations until the first quarter of 2025.
Without additional funding, it appears unlikely that Nikola will be able to sustain itself beyond that timeframe.
The electric vehicle sector has proven to be a challenging market, with several companies struggling to stay in business. Fisker Inc., another American EV startup, also faced financial difficulties and recently saw its stock trading suspended ahead of bankruptcy negotiations.
A leasing company has since purchased Fisker’s remaining North American inventory, but concerns remain about the availability of software updates and service for existing customers.
The auto industry has also seen supply chain disruptions affecting manufacturers. Just last week, a German supplier declared bankruptcy after 78 years in business.
The collapse was linked to cost-cutting measures by one of its largest customers, transmission giant ZF, which aims to reduce expenses by billions over the next five years.
