👉 Background: Nikola launched back in 2014 with big, bold plans to revolutionise trucking with hydrogen-electric batteries. It went public via a SPAC (aka blank cheque company) that was valued at $30 billion USD back in June 2020.

‍👉 What happened: Now, Nikola will file for bankruptcy after it couldn’t raise money or find a new buyer. This isn’t completely surprising because Nikola has been facing scandals for years.

• It had been accused of making exaggerated claims about their technology, claiming they built it from the "ground up" but it was found to have purchased the battery from another company
• It released a marketing video showing their truck driving, but it was really just rolling down a hill.

‍👉 What else: So now, Nikola says it just couldn’t scrape together enough cash to keep the hydrogen-engines purring. And sadly, this is all part of the natural evolution of a entering new industry.

What's the key learning?

💡Whenever a shiny new industry takes off, it often attracts a flood of startups all elbowing each-other to become the next big thing.

💡As the industry matures and competition intensifies, funding becomes harder to secure and weaker players struggle to survive. And this leads to consolidation, where only the strongest companies remain standing.

💡This is what we’re seeing in the electric vehicle market right now.  

• Companies like Tesla, BYD, and even legacy car markers are tightening their grip
• Startup EV companies like Fisker, Canoo and Weltmeister have all declared bankruptcy over the past few years after raising and burning through billions of dollars in cash.

And now, Nikola joins the pack slash scrapheap.