Electric car maker Nikola explores sale, partnerships, cash dwindling

(Bloomberg) — Nikola Corp. is exploring options to avoid a cash crunch, including a possible sale of part or all of the company, according to people familiar with the matter.

Other possibilities being considered include bringing in partners or raising new capital, people familiar with the matter said. The people spoke on condition of anonymity discussing private efforts. No decision has been made and management could decide not to take action.

“While the electric vehicle industry faces external headwinds, we have worked tirelessly to raise capital, reduce debt, preserve cash and provide excellent service to our customers,” Nikola said in an emailed statement.

The sale ends a long and difficult saga for the maker of electric and hydrogen-powered semi-trucks. Shortly after going public in a blank-check deal in 2020, founder Trevor Milton resigned and was later convicted of defrauding investors over the development of the company’s technology. Since then, Nikola has gone through a series of chief executives while grappling with weak sales of its clean technology and a plunging stock price.

Its shares fell 22% in New York as of 3 p.m. Thursday. They have lost 95% of their value in the past 12 months.

Efforts to raise capital or find strategic alternatives have been led by former Morgan Stanley analyst and General Motors Co. executive Steve Girsky, who has made Nico through his special purpose acquisition company Pull the market.

Nikola said on its October earnings call that it had enough cash at the time to cover first-quarter debt, but not more. The company filed in December to sell up to $100 million worth of stock.

The company has admitted it is exploring options but has not provided specific details. During an October conference call, Gilsky said Nikola was “actively talking to a number of potential different partners who value what we do and what we’ve built.”

Nikola has been looking to bolster its cash reserves for some time, including through rounds of layoffs.

Part of its financial troubles stem from problems with electric trucks. In 2023, Nikola recalled all 209 electric big drills it sold and temporarily halted sales after a fire investigation found a defective battery pack. The recall did not affect the hydrogen-electric semi-trucks the company had begun producing at the time.

More stories like this can be found at Bloomberg.com