Nikola said Wednesday it had filed for Chapter 11 bankruptcy protection and would pursue a sale of all or most of its assets, after grappling with rapid cash burn and struggling to raise funds in the past few quarters.

The company, which once enjoyed a surging stock price, struggled to turn its plans for electric and hydrogen trucks into a viable business.

Nikola Corporation (NASDAQ:NKLA) shares are trading lower in the premarket session on Wednesday, after it filed for Chapter 11 bankruptcy, seeking to auction its assets while continuing limited operations through March 2025.

Nikola – a once popular auto startup of investors – filed for bankruptcy protection after failing to secure a buyer or raise additional funds.

Troubled electric vehicle maker Nikola is filing for 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 its capabilities.

Nikola's CEO said that the company could not overcome its financial challenges in recent months, and decided bankruptcy was its best option.

Nikola filed for Chapter 11 bankruptcy protection, according to a court filing on Wednesday, as the electric truck maker battled rapid cash burn and struggled to raise additional funds amid uncertain demand for its hydrogen and battery-powered big rigs.

Nikola Corporation (NASDAQ:NKLA) plunged in early trading on Wednesday after the company announced that it filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.

Nikola, the hydrogen-truck maker that briefly sported a market value comparable to Ford Motor, has filed for bankruptcy with plans to wind down its business.