Nikola, once called the 'Second Tesla,' plunges 39% after filing for bankruptcy protection

Nikola Files for Bankruptcy Protection
After Failing to Overcome Electric Vehicle Market Downturn

Once hailed as the 'second Tesla' and having surpassed Ford in market capitalization, the electric and hydrogen truck manufacturer Nikola has ultimately filed for bankruptcy after facing financial difficulties.

Reuters Yonhap News

On the 19th (local time), Nikola announced that it had filed a petition for relief under Chapter 11 of the Delaware Bankruptcy Court. The company also submitted a request for approval to proceed with asset auctions and sales under Section 363 of the Bankruptcy Code.

Steve Girsky, CEO of Nikola, stated, "Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our management capabilities. Over the past few months, we took several measures to raise capital, reduce debt, and secure cash, but unfortunately, these efforts were not sufficient to overcome these significant challenges," explaining the reasons behind the bankruptcy protection filing.

Following the news of Nikola's bankruptcy protection filing, its stock price closed down 39% on the New York Stock Exchange that day. The company's stock had already plummeted 97% over the past year based on the previous day's closing price.

Founded in 2015, Nikola gained attention as the 'second Tesla' by announcing plans to produce electric and hydrogen trucks. In 2020, the company attracted a large investment from General Motors (GM) and strengthened cooperation, causing its stock price to soar. At the peak of investor enthusiasm, its market capitalization reached $30 billion, surpassing the automaker Ford.

However, the stock rally came to a halt when Hindenburg Research, known as an activist short-selling investment firm, revealed the shocking fact that the driving scenes of Nikola's hydrogen electric truck in promotional videos were filmed on downhill slopes.

Subsequently, Nikola came under investigation by U.S. securities and judicial authorities, and its founder Trevor Milton was sentenced to four years in prison for fraud, having deceived investors by promoting unfinished technology.

Although Nikola attempted a turnaround by replacing its management team in 2023, it failed to recover due to factors such as the downturn in the electric vehicle market.

This content was produced with the assistance of AI translation services.