Summary:
Nikola filed for Chapter 11 bankruptcy after a dramatic fall from a $27 billion valuation.
Fisker, Canoo, Arrival, and others have also faced bankruptcy, highlighting the volatility of the EV market.
Regulatory scrutiny and production challenges have plagued many electric vehicle startups.
The industry is learning critical lessons about sustainability and transparency.
The Downfall of Nikola
Electric vehicle startup Nikola (NKLA) filed for Chapter 11 bankruptcy on February 19, marking a significant fall from grace for a company that once boasted a $27 billion valuation. Nikola's downfall began shortly after its 2020 SPAC public offering, when Hindenburg Research labeled it an "intricate fraud". Following a settlement with the Securities and Exchange Commission and the conviction of its founder Trevor Milton for fraud, the company struggled to recover.
Visitors watch the unveiling of a Nikola Corp. Tre FCEV truck at the IAA Transportation show in Hanover, Germany, on September 19, 2022.
Other Fallen EV Startups
Nikola is not alone in its failures. The EV industry has seen numerous startups crash, including:
- Fisker: This company filed for Chapter 11 bankruptcy in June 2023, after its Ocean electric SUV received poor reviews and faced multiple complaints.
- Canoo: Once valued at $2.4 billion, Canoo filed for Chapter 7 bankruptcy a few years after going public, plagued by lawsuits and product delivery failures.
- Coda Automotive: Launched in 2009, it raised over $300 million but managed to sell only 117 electric sedans before filing for bankruptcy in 2013.
- Arrival: This British electric bus maker filed for administration in February 2024 after failing to produce commercial vehicles at scale despite high valuations.
- Proterra: Known for electric buses, it filed for Chapter 11 bankruptcy in 2023 due to high operational costs and supply chain issues.
- Lordstown Motors: After filing for bankruptcy in June 2023, it was reborn as Nu Ride Inc. but continues to face challenges.
The EV Landscape
The electric vehicle market has been rife with challenges, from regulatory scrutiny to production issues and market volatility. As many startups falter, the industry is left with key lessons about sustainability and transparency in business practices.
An overview of electric vehicle startups that have faced bankruptcy.
Comments