10-K: Nikola Files for Chapter 11, Equity to Be Cancelled

Nikola Corporation has filed for Chapter 11 bankruptcy, sold substantially all its assets, ceased business operations, and its common stock will be cancelled for no value.

Summary

• Nikola Corporation and its domestic subsidiaries filed voluntary petitions for Chapter 11 relief on February 19, 2025, in the U.S. Bankruptcy Court for the District of Delaware.
• The company has sold substantially all of its assets through bankruptcy proceedings since April 2025 and has ceased business operations, including the manufacture and sale of trucks.
• A Plan of Liquidation was filed on June 23, 2025, confirmed by the Bankruptcy Court on September 5, 2025, and provides for the liquidation of remaining assets, creation of a liquidation trust, and distributions to allowed claims holders.
• All common stock and equity securities will be cancelled by order of the Bankruptcy Court, and holders of such interests will receive no distribution.
• The company's common stock was suspended from trading on Nasdaq on February 26, 2025, and voluntarily delisted and deregistered effective April 14, 2025.
• For the fiscal year ended December 31, 2024, Nikola reported a net loss from continuing operations of $958.2 million, compared to $864.6 million in 2023.
• Total revenues increased by 92% to $68.9 million in 2024 from $35.8 million in 2023, primarily due to increased truck shipments (200 Tre FCEVs in 2024 vs. 35 in 2023).
• Cost of revenues for truck sales increased by 15% to $279.9 million in 2024, driven by increased production, partially offset by a voluntary recall of BEV trucks in H2 2023.
• Impairment expense of $336.8 million was recognized in 2024, including property, plant, and equipment ($213.5 million), indefinite-lived intangible assets ($47.2 million), finite-lived intangible assets ($29.9 million), goodwill ($5.2 million), and finance/operating lease right-of-use assets ($41.0 million).
• Cash and cash equivalents decreased significantly to $104.3 million as of December 31, 2024, from $464.7 million as of December 31, 2023.
• The company had a material weakness in internal control over financial reporting related to ineffective IT general controls (ITGCs) as of December 31, 2024.

Sentiment

Score: 1

Explanation: The company has filed for Chapter 11 bankruptcy, ceased all operations, and its equity will be cancelled for no value, representing a complete failure for shareholders.

Positives

• Truck sales revenue increased by 107% to $62.2 million in 2024, driven by higher Tre FCEV shipments (200 units in 2024 vs. 35 in 2023).
• Service and other revenues increased by 15% to $6.7 million in 2024, primarily due to regulatory credit sales, service, and hydrogen sales.
• Research and development expenses decreased by 24% to $158.1 million in 2024, mainly due to reduced spending on outside development, purchased components, and professional services.
• Selling, general, and administrative expenses decreased by 4% to $191.2 million in 2024, largely due to lower stock-based compensation and personnel costs.
• Interest expense, net, decreased by 70% to $22.8 million in 2024, primarily due to the conversion of convertible notes and an increase in interest income.
• Other expense, net, decreased by 98% to $3.5 million in 2024, driven by a decrease in net losses on revaluations of derivative assets and liabilities.

Negatives

• Nikola Corporation has filed for Chapter 11 bankruptcy and ceased all business operations, including truck manufacturing and sales.
• All common stock and equity securities will be cancelled, and holders will receive no distribution, resulting in a complete loss of investment.
• The company's common stock was delisted from Nasdaq and now trades on the Pink Market under 'NKLAQ', reflecting its distressed status.
• Net loss from continuing operations increased to $958.2 million in 2024 from $864.6 million in 2023.
• Gross loss increased by 8% to $230.4 million in 2024, indicating that cost of revenues significantly exceeded revenues.
• Impairment expense of $336.8 million was recognized in 2024, reflecting a significant write-down of assets including property, plant, equipment, and intangible assets.
• Cash and cash equivalents declined sharply from $464.7 million in 2023 to $104.3 million in 2024.
• Net cash used in operating activities increased to $521.5 million in 2024 from $496.2 million in 2023.
• The company identified a material weakness in its internal control over financial reporting related to ineffective IT general controls (ITGCs) as of December 31, 2024.
• A voluntary recall of BEV trucks was initiated in Q3 2023 due to a battery pack thermal event, leading to $57.4 million in accrued recall campaign costs as of December 31, 2024, with $44.3 million incurred.
• Inventory write-downs of $88.0 million were recorded in 2024, following $71.2 million in 2023, including $45.7 million for BEV battery packs and other components deemed excess or obsolete due to the recall.

Risks

• The company's pending bankruptcy proceedings and liquidation mean all existing equity interests will be cancelled for no value, leading to a total loss for equity investors.
• Trading in the common stock is highly speculative and current prices may not reflect the pending cancellation of shares.
• The company's ability to execute its business model, including demand for and market acceptance of its products and services, is no longer relevant due to cessation of operations.
• Changes in applicable laws or regulations, particularly those related to zero-emission vehicles, will not impact the company's future operations as it has ceased business.
• Risks associated with the outcome of any legal, regulatory, or judicial proceedings, although some claims are being subordinated or settled through the Plan of Liquidation.
• Capital requirements and the ability to raise sufficient capital are no longer relevant as the company is liquidating.
• Risks related to the recall of battery-electric trucks, including higher than expected costs, additional problems, delays, order cancellations, litigation, and reputational harm, have been largely addressed by the cessation of operations and liquidation plan.
• Dependence on a limited number of suppliers for battery products and fuel cell power modules, which could have caused supply chain disruptions, is no longer a risk for ongoing operations.
• Dependence on dealers to facilitate sales to end users is no longer a risk due to cessation of sales.

Future Outlook

The company's future outlook is dominated by its Chapter 11 bankruptcy and Plan of Liquidation. It has ceased all business operations, including manufacturing and sales, and is in the process of winding down. All common stock and equity securities will be cancelled, and holders will receive no distribution. The Plan of Liquidation is expected to be implemented upon satisfaction of conditions precedent to the Effective Date, currently anticipated in December 2025, but subject to change without notice. The company is assessing the impact of the recently enacted One Big Beautiful Bill Act (OBBBA) on its consolidated financial statements for future periods, though its relevance is limited given the liquidation.

Management Comments

• Management has concluded that the Company Parties' need for Bankruptcy Petitions under Chapter 11 raises substantial doubt about the Company's ability to continue as a going concern for 12 months following the issuance of the financial statements.
• Management believes that the accruals for product warranties and recall campaigns are adequate, but acknowledges that substantial additional charges may be required in future periods based on new information or changes in facts and circumstances.
• Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Industry Context

Prior to its bankruptcy, Nikola operated in the highly competitive Class 8 heavy-duty truck industry, focusing on hydrogen fuel cell electric vehicles (FCEV) and battery electric vehicles (BEV) to address the global push for zero-emission transportation. The company aimed to compete on total cost of ownership, availability of fueling networks, and technological innovation against established OEMs (Daimler, Volvo, Paccar) and new entrants (Tesla, Hyundai, Toyota). Its HYLA brand was developing hydrogen fueling infrastructure. The industry is characterized by evolving regulatory requirements and significant investments in zero-emission platforms by various players. Nikola's cessation of operations removes a player from this evolving, competitive landscape.

Comparison to Industry Standards

• The company's Tre FCEV model was eligible for California's HVIP program, offering a base incentive of $240,000 per truck, up to $288,000 for specific fleets, and an additional $40,000 in federal clean commercial vehicle tax credits, indicating its products met certain regulatory standards for zero-emission vehicles comparable to other eligible vehicles in the market.
• The Tre BEV was eligible for a base incentive of $120,000 under HVIP and $40,000 in federal tax credits, similar to other BEV offerings.
• The company's manufacturing facility in Coolidge, Arizona, was designed with environmentally thoughtful features like energy-efficient LED lighting, HVAC, and a 750 kW solar array, aligning with sustainability trends in modern manufacturing facilities.
• The company's safety programs resulted in ISO 9001, 14001, and 45001 certifications, demonstrating adherence to international quality, environmental, and occupational health and safety management standards, comparable to leading industry players.
• The company's vehicles were designed to comply with U.S. Federal Motor Vehicle Safety Standards (FMVSS) and Canadian Motor Vehicle Safety Standards (CMVSS), as well as ISO standards and UN GTR 20 for electrically-propelled vehicles, indicating efforts to meet global safety benchmarks for electric vehicles.

Management Changes

Corporate Governance

Legal Proceedings

• The company reached a settlement with the SEC on December 21, 2021, agreeing to pay a $125.0 million civil penalty. As of December 31, 2024, $80.2 million remains, which will be treated as an Allowed General Unsecured Claim of approximately $43.1 million with a $4.0 million cash payment on the Effective Date, and $40.0 million as a subordinated claim under the Plan of Liquidation.
• An arbitration panel awarded the company approximately $165.0 million plus interest against Mr. Milton on October 20, 2023, which was confirmed in the U.S. District Court of Arizona, and the company is pursuing collection.
• The company and certain current/former officers and directors are defendants in a consolidated securities class action lawsuit (Shareholder Securities Litigation) in the U.S. District Court of Arizona. The Lead Plaintiff's claim of over $914 million will be subordinated under the Plan of Liquidation, which the Lead Plaintiff is appealing.
• Multiple shareholder derivative actions (Byun v. Milton, Salguocar v. Girsky, Huhn v. Milton, Rhodes v. Milton, BeHage v. Milton, Brown v. Milton, Lomont v. Milton, Roy v. Russell, Boisjolie v. Selwood) were filed against current and former directors/officers. The Consolidated Chancery Action (Rhodes and BeHage Rowe) was approved for settlement by the Bankruptcy Court on July 21, 2025, and is awaiting approval from the Delaware Chancery Court.
• The company accrued $17.5 million for loss contingency related to derivative litigation settlements and a corresponding $17.5 million receivable for anticipated insurance proceeds as of December 31, 2024.
• Lion Electric filed a complaint on March 2, 2023, alleging tortious interference with a business relationship, with a $3.3 million estimated liability reflected in accrued expenses.
• Lightning eMotors filed a complaint on March 9, 2023, alleging tortious interference, which is currently stayed indefinitely due to Lightning eMotors' receivership; the claim is not deemed probable or reasonably estimable as no Proof of Claim was filed in the bankruptcy.

Related Party Transactions

• Commercial relationships with Robert Bosch, LLC, Robert Bosch Battery Systems, LLC, and Robert Bosch Automotive Steering, LLC (collectively, the Bosch Entities). Michael L. Mansuetti, a director, is President of Robert Bosch, LLC. Purchases of $7.8 million were recorded to these entities in 2024, with $13.9 million in accounts payable and $6.9 million in accrued expenses as of December 31, 2024.
• Membership Interest and Asset Purchase Agreement with FFI Phoenix Hub Holdings LLC (FFI) on July 3, 2023, for the sale of Phoenix Hydrogen Hub LLC and related assets. Andrew M. Vesey, a director, serves as Manager, President, and Treasurer of USA Fortescue Future Industries LLC, FFI's parent company. The company received net proceeds of approximately $20.7 million in 2023 and sold $25.1 million of assets in 2024, with a $4.9 million holdback receivable as of December 31, 2024.
• European alliance agreement with CNHI and Iveco, which established a joint venture (Nikola Iveco Europe GmbH). Gerrit A. Marx, a former director, served as CEO of Iveco Group N.V. and Iveco. The company recorded purchases of $19.1 million to these entities and their subsidiaries in 2024, with $3.6 million of accounts payable and $1.9 million in accrued expenses as of December 31, 2024.

Stakeholder Impact

• Shareholders: Will lose their entire investment as all common stock and equity securities will be cancelled for no value under the Plan of Liquidation.
• Creditors: Will receive distributions from the liquidation trust based on allowed claims, with some claims (like certain SEC and shareholder litigation claims) being subordinated.
• Employees: The company has ceased business operations and is winding down, indicating significant job losses and cessation of employment.
• Customers: Past customers of BEV trucks were impacted by a recall, which has been completed. Future customers will not be served as the company has ceased sales and manufacturing.
• Suppliers: The company has ceased operations, impacting ongoing relationships and potentially leading to unfulfilled contracts, though some liabilities are being addressed through bankruptcy.

Next Steps

• Implementation of the Plan of Liquidation upon satisfaction (or waiver) of conditions precedent to the Effective Date, currently expected in December 2025.
• Wind down and dissolution of the Company Parties.
• Distributions to holders of allowed claims through a liquidation trust.
• Filing a Form 15 with the SEC as soon as possible after filing this report, as the company is no longer subject to periodic reporting obligations under Section 15(d) of the Exchange Act.
• Delaware Chancery Court approval of the settlement for the Consolidated Chancery Action at a hearing scheduled for November 20, 2025.
• Assessing the impact of the One Big Beautiful Bill Act (OBBBA) on consolidated financial statements for future periods.

Key Dates

Recommendation

Nikola Corporation has filed for Chapter 11 bankruptcy, ceased all business operations, and its Plan of Liquidation explicitly states that all common stock and equity securities will be cancelled for no value. This means current shareholders will lose their entire investment. While the stock may still trade on the OTC Pink Market, its value is effectively zero. Any investment in Nikola's equity at this stage is purely speculative and carries an almost certain risk of total loss.

Keywords

Bankruptcy, Liquidation, Chapter 11, Equity Cancellation, Delisting, Nikola Corporation, Electric Vehicles, Fuel Cell Electric Vehicles, BEV, FCEV, Heavy-Duty Trucks, Hydrogen Fueling, HYLA, Financial Results, SEC Filing, 10-K