A hearing regarding the bankruptcy will take place at 10 a.m. ET on February 20 in the U.S. Bankruptcy Court for the District of Delaware. Nikola plans to initiate an auction and sale process under Section 363 of the U.S. Bankruptcy Code, seeking a stalking horse bidder—an initial offer that sets a minimum price for the assets, preventing lower bids from other bidders.

Should the auction be necessary, it is scheduled for March 31, with a sale expected by mid-April. Key assets up for sale include Nikola’s refurbished manufacturing plant in Coolidge, Arizona, intellectual property related to its trucks, and unsold inventory, including around 150 battery-electric trucks.

Nikola has faced significant challenges, including the need to return several battery-electric trucks recalled due to issues with batteries from its former subsidiary, Romeo Power, which was sold to Mullen Automotive for $3.5 million in September 2023. Brea, California-based Mullen also acquired a battery production line and testing equipment from Nikola in late January.

The company’s financial woes have resulted in multiple rounds of layoffs as it attempted to reduce cash burn. Nikola announced the elimination of 135 positions in October, with additional layoffs occurring in December, June 2023, and November 2022. By October, Nikola’s financial situation had deteriorated, with a reported loss of $200 million in the third quarter of 2024, down from $425.5 million in the same period the previous year. However, its cash reserves plummeted to $198.3 million by September 30, down from $464.7 million at the end of 2023.

Chief Financial Officer Tom Okray warned that the company would run out of funds early in the first quarter of 2025 if new funding was not secured. Despite efforts to optimize cash flow and seek partnerships, including a nonbinding letter of intent with an unidentified interested party that ultimately did not materialize, Nikola was unable to find a viable path forward.

“Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate,” stated CEO Steve Girsky following the Chapter 11 filing. He acknowledged the numerous actions taken to raise capital and reduce liabilities but lamented that these efforts were insufficient to overcome the significant challenges the company faced.

Girsky, who took over as CEO in August 2023, succeeded Michael Lohscheller, who resigned for health reasons after just 11 months in the role. Girsky brought in several former colleagues from General Motors, including Mary Chan as chief operating officer, and initially served as CFO before Okray’s appointment.

As Nikola navigates this turbulent period, the outcome of the bankruptcy proceedings and asset auction will be closely watched as the company attempts to wind down operations in a challenging market.