Nikola Motor Company (Nikola), a developer of heavy-duty battery-electric (BEV) and fuel-cell electric vehicle (FCEV) trucks, has announced plans to liquidate the assets of battery manufacturer Romeo Power, which it acquired for USD 144 million in October 2022.

The company acquired Romeo Power to accelerate its battery pack production, anticipating a decrease in the cost of Romeo's batteries. However, the company later acknowledged that costs had actually increased due to unforeseen expenses associated with the materials used in Romeo's battery packs.

Thus, Nikola is now terminating its association with Romeo Power and has initiated proceedings under the California Assignment for the Benefit of Creditors (ABC) statutory scheme.

Romeo Power supplies batteries to Nikola's prototype electric trucks, along with LG Energy Solution and Proterra.

Analyst QuickTake: Today’s news adds to Nikola’s recent setbacks, including the layoffs announced in June 2023. Nikola and other electric truck makers have been facing similar struggles recently. BEV truck maker Lordstown Motors filed for bankruptcy in June 2023 and Tesla delayed higher volume production for its “Semi” electric trucks until late 2024 due to battery supply constraints.