Nikola Corporation is set to begin liquidating the assets of battery maker Romeo Power, less than a year after acquiring the company.
The American electric truck manufacturer purchased Romeo Power in August 2022 for approximately $144 million in stock as part of its efforts to accelerate battery pack production.
Romeo Power is one of the battery suppliers for Nikola's prototype electric trucks, along with LG Energy Solution and Proterra Inc.
Nikola, which went public in 2020, has faced challenges meeting the expectations of early investors due to increased commodity prices and limited access to capital over the past year.
The company has now decided to discontinue its operations with Romeo Power and has initiated a proceeding under the California Assignment for the Benefit of Creditors (ABC) statutory scheme, according to a company spokesperson.
Nikola's struggles reflect the difficulties experienced by many other electric vehicle (EV) startups. Arrival, a British EV van maker, recently announced its intention to terminate a merger with a blank-check firm, while Lordstown Motors filed for bankruptcy last week.
In contrast, industry leader Tesla surpassed market expectations for second-quarter deliveries, benefiting from price reductions and US federal credits that increased the affordability of its electric vehicles.
Contact Angela at angela@proactiveinvestors.com
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