Troubled electric vehicle maker Nikola has filed for Chapter 11 bankruptcy protection.
The company, once a rising star on Wall Street, became enmeshed in scandal and its founder was convicted in 2022 for misleading investors about the company’s capabilities.
The Arizona company 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.
Nikola 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 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 for the Company and its stakeholders,” he explained.
Shares tumbled more than 47% before the market opened Wednesday.
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