EV truck manufacturer Nikola has announced its decision to liquidate the assets of battery supplier Romeo Power, less than a year after acquiring the company. Nikola, which went public in 2020, has faced challenges meeting the high expectations of early investors, exacerbated by rising commodity costs and limited access to capital over the past year.
Nikola, which went public in 2020, has faced challenges meeting the high expectations of early investors, exacerbated by rising commodity costs and limited access to capital over the past year.
In August of last year, Nikola purchased Romeo Power for approximately $144 million in stock, intending to boost its battery pack manufacturing efforts. However, Nikola has now discontinued its operations with Romeo Power and initiated a proceeding under the California Assignment for the Benefit of Creditors (ABC) statutory scheme.
Nikola’s struggles align with the difficulties faced by many other EV startups. Earlier on the same day, British EV van maker Arrival announced its intention to terminate its merger with a blank-check firm, while Lordstown Motors filed for bankruptcy last week.
In contrast to these challenges, market leader Tesla exceeded market expectations for second-quarter deliveries. The company’s electric vehicles became more affordable due to price cuts and US federal credits, contributing to its success.
Romeo Power had been one of the battery suppliers for Nikola’s prototype electric trucks, alongside LG Energy Solution and Proterra Inc.