The electric vehicle industry suffered a rough year in 2024.
The industry's leading battery electric vehicle company Tesla had its first-ever sales decline in 2024, delivering 1.79 million vehicles which was a 1.1% decrease compared to 2023, Kelly Blue Book reported.
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The industry also lost an EV company that had high hopes of competing against Tesla when Fisker Group Inc. filed for Chapter 11 bankruptcy on June 17, 2024, to liquidate its assets.
Related: Troubled trucking company files for Chapter 11 bankruptcy
Fisker began delivering its Ocean battery-electric crossover SUV in 2023 to compete with Tesla, but by February 2024 the vehicles and the company began having various problems, which led to its bankruptcy.
The parent company of another EV maker Via Motors on Dec. 4, 2024, filed for Chapter 11 bankruptcy after closing down all of its EV manufacturing operations.
Via Motors' parent Ideanomics Inc., which filed its petition in the U.S. Bankruptcy Court for the District of Delaware, sought to sell its assets to its secured debt lender Tillou Management & Consulting, which offered a credit bid to purchase the company.
Via Motors manufactured a line of EVs that included box trucks, walk-in vans, service trucks, skate trucks, walk-through shuttle buses, and step vans.
Nikola
Nikola files for bankruptcy seeking sale
And now Nikola Corp. (NKLA) , a pioneer in the development of battery electric and hydrogen fuel cell electric semi-trucks, has filed for Chapter 11 bankruptcy seeking a sale of its assets.
Related: Major trucking company files Chapter 11 bankruptcy
The Phoenix-based electric vehicle maker on Feb. 19 filed its petition in the U.S. Bankruptcy Court for the District of Delaware, listing $500,000 to $1 billion in assets and $1 billion to $10 billion in debts.
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The debtor owes $97.7 million in funded debt, including $44.2 million in convertible notes and $53.5 million in lease obligations. Its largest unsecured creditors include the U.S. Securities and Exchange Commission, owed $80.2 million; U.S. Bank Trust Co. NA, owed over $31.7 million; and Robert Bosch LLP, owed over $13.3 million in trade debt.
The debtor asserted in a bankruptcy declaration that a recall of all of its BEV trucks in the beginning of the third quarter of 2023 to replace defective battery packs incurred significant expenses and $44 million in losses which led to its bankruptcy filing.
Nikola said that the recall's total impact will be an estimated $56 million. The company expected to complete the recall retrofits by the end of 2024, but the repairs took longer than expected and will be delayed longer because of the Chapter 11 filing, according to a declaration by CEO Stephen J. Girsky.
Hydrogen fuel cell business has difficulties
The debtor said its hydrogen fuel cell vehicle business had difficulties since the market is in its early stages and the company was facing production shortages. Also, a lack of hydrogen infrastructure hampered truck sales, and building new infrastructure for vehicles would require a significant investment.
Nikola reported a $966.3 million loss in the year ending Dec. 31, 2023, and a $482.2 million loss in the nine months ending Sept. 30, 2024. The company said it currently has a $3.6 billion deficit, with $47 million on hand.
The company said it does not have significant cash resources to fund operations and no prospect of raising additional funds. It said its best option was to file bankruptcy and sell the company's assets.
A prepetition marketing effort to sell the company was unsuccessful, but the company is discussing sale possibilities with three investors through the bankruptcy process and could consider a sale of separate business segments.
Nikola launched operations in 2018 and began making BEV trucks in the first quarter of 2022 and fuel cell EVs in the third quarter of 2023 at its Coolidge, Ariz., manufacturing facility.
The company's BEV trucks, which compete against rival Tesla's Semi truck, have a 300-mile range, while its fuel-cell EVs have a 500-mile range.
The company's manufacturing facility has a manufacturing capacity of 2,400 vehicles per year, and its current inventory includes 156 BEV trucks and 103 fuel cell trucks. It also has 87 trucks at dealer locations.
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