Troubled electric vehicle maker Nikola has filed for Chapter 11 bankruptcy protection months after saying that it would likely run out of cash early this year.

Nikola was a hot start-up and rising star on Wall Street before becoming enmeshed in scandal and its founder was convicted in 2022 for misleading investors about the Arizona company’s technology.

At the trial of founder Trevor Milton, prosecutors say a company video of a prototype truck appearing to be driven down a desert highway was actually a video of a nonfunctioning Nikola that had been rolled down a hill.

But the hype around the company was immense. In 2020, Nikola was valued at around $30 billion, exceeding the market capitalization of Ford Motor Co.

Nikola filed for protection in the United States Bankruptcy Court for the District of Delaware and said Wednesday that it has also filed a motion seeking approval to pursue an auction and sale of the business.

The company has about $47 million in cash on hand. rolled

Nikola Corp. plans to to continue limited service and support operations for vehicles on the road, including fueling operations through the end of March, subject to court approval. The company said that it will need to raise more funding to support those types of activities after that time.

“Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate,” CEO Steve Girsky said in a statement.

The executive said the company has made efforts in recent months to raise funds and reduce liabilities and preserve cash, but that it hasn’t been enough.

“The Board has determined that Chapter 11 represents the best possible path forward under the circumstances,” Girsky said.

In December 2023 founder Trevor Milton was sentenced to four years in prison after being convicted of exaggerating claims about his company’s production of zero-emission 18-wheel trucks, leading to sizeable losses for investors.

Milton was convicted of fraud charges, portrayed by prosecutors as a con man six years after he had founded the company in a basement in Utah.

Prosecutors said Milton falsely claimed to have built its own revolutionary truck that was actually a General Motors product with Nikola’s logo stamped onto it.

Called as a government witness, Nikola’s CEO testified that Milton “was prone to exaggeration” when pitching his venture to investors.

Milton resigned in 2020 amid reports of fraud that sent Nikola’s stock prices into a tailspin. Investors suffered heavy losses as reports questioned Milton’s claims that the company had already produced zero-emission 18-wheel trucks.

Even as he’s vowed to push the United States ahead in artificial intelligence research, President Donald Trump’s threats to alter federal government contracts with chipmakers and slap new tariffs on the semiconductor industry may put new speed bumps in front of the tech industry.

Since taking office, Trump has said he would place tariffs on foreign production of computer chips and semiconductors in order to return chip manufacturing to the U.S. The president and Republican lawmakers have also threatened to end the CHIPS and Science Act, a sweeping Biden administration-era law that also sought to boost domestic production.

But economic experts have warned that Trump’s dual-pronged approach could slow, or potentially harm, the administration’s goal of ensuring that the U.S. maintains a competitive edge in artificial intelligence research.

Saikat Chaudhuri, an expert on corporate growth and innovation at U.C. Berkeley’s Haas School of Business, called Trump’s derision of the CHIPS Act surprising because one of the biggest bottlenecks for the advancement of AI has been chip production. Most countries, Chaudhuri said, are trying to encourage chip production and the import of chips at favorable rates.

“We have seen what the shortage has done in everything from AI to even cars,” he said. “In the pandemic, cars had to do with fewer or less powerful chips in order to just deal with the supply constraints.”

The Biden administration helped shepherd in the law following supply disruptions that occurred after the start of the COVID-19 pandemic ? when a shortage of chips stalled factory assembly lines and fueled inflation ? threatened to plunge the U.S. economy into recession. When pushing for the investment, lawmakers also said they were concerned about efforts by China to control Taiwan, which accounts for more than 90% of advanced computer chip production.

As of August 2024, the CHIPS and Science Act had provided $30 billion in support for 23 projects in 15 states that would add 115,000 manufacturing and construction jobs, according to the Commerce Department. That funding helped to draw in private capital and would enable the U.S. to produce 30% of the world’s most advanced computer chips, up from 0% when the Biden-Harris administration succeeded Trump’s first term.

The administration promised tens of billions of dollars to support the construction of U.S. chip foundries and reduce reliance on Asian suppliers, which Washington sees as a security weakness. In August, the Commerce Department pledged to provide up to $6.6 billion so that Taiwan Semiconductor Manufacturing Co. could expand the facilities it is already building in Arizona and better ensure that the most advanced microchips are produced domestically for the first time.

But Trump has said he believes that companies entering into those contracts with the federal government, such as TSMC, “didn’t need money” in order to prioritize chipmaking in the U.S.

“They needed an incentive. And the incentive is going to be they’re not going to want to pay at 25, 50 or even 100% tax,” Trump said. TSMC held board meetings for the first time in the U.S. last week. Trump has signaled that if companies want to avoid tariffs they have to build their plants in the U.S. ? without help from the government. Taiwan also dispatched two senior economic affairs officials to Washington to meet with the Trump administration in a bid to potentially fend off a 100% tariff Trump has threatened to impose on chips.

If the Trump administration does levy tariffs, Chaudhuri said, one immediate concern is that prices of goods that use semiconductors and chips will rise because the higher costs associated with tariffs are typically passed to consumers.

Elon Musk, during a video call on Thursday at the World Governments Summit in Dubai, UAE, called for the United States to “delete entire agencies” from the federal government, pushing for drastic spending cuts and a restructuring of national priorities under President Donald Trump.

Musk, who was speaking remotely, painted a broad picture of his view on the Trump administration's goals, interweaving topics of “thermonuclear warfare” and the risks posed by artificial intelligence. He criticized what he saw as the dominance of bureaucracy over democratic governance.

“I think we do need to delete entire agencies, rather than just leaving a few behind,” Musk continued. “If we don’t remove the roots of the weed, it’s easy for it to grow back.”

Although Musk has appeared at the summit before, this time his comments carried more weight, as he now holds significant control over certain government functions, especially with Trump’s endorsement, after taking charge of the Department of Government Efficiency. His role has involved sidelining long-term government officials, gaining access to sensitive data, and prompting legal debates about presidential power limits.

In his remarks, Musk also expressed an isolationist stance regarding U.S. influence in the Middle East, especially given the ongoing legacy of the U.S. wars in Afghanistan and Iraq following the September 11, 2001, terrorist attacks.

Musk emphasized that under Trump, the U.S. has become “less interested in interfering with the affairs of other countries,” suggesting that the U.S. had sometimes been overly aggressive in international affairs. Speaking to the UAE audience, Musk noted, “There are times the United States has been kind of pushy in international affairs, which may resonate with some members of the audience,” acknowledging the UAE's autocratic governance.

On domestic matters, Musk touched on the Trump administration's push to eliminate diversity, equity, and inclusion (DEI) efforts, linking it to the potential risks of AI. He joked, “If hypothetically, AI is designed for DEI, you know, diversity at all costs, it could decide that there’s too many men in power and execute them.”

Regarding AI, Musk revealed that X’s new AI chatbot, Grok 3, would be ready in about two weeks, calling it “kind of scary.” He also criticized Sam Altman’s leadership at OpenAI, comparing it to a nonprofit dedicated to saving the Amazon rainforest that becomes a lumber company. Musk recently made a $97.4 billion bid to take over OpenAI, and a court filing on his behalf stated that he would withdraw the offer if OpenAI proceeds with its plan to become a for-profit entity.

Musk also shared plans for a new “Dubai Loop” project as part of his work with the Boring Company, which has been digging tunnels in Las Vegas to accelerate transit. According to a later statement from Dubai’s crown prince, Sheikh Hamdan bin Mohammed Al Maktoum, Dubai and the Boring Company would explore the development of a 17-kilometer (10.5-mile) underground network with 11 stations capable of transporting over 20,000 passengers per hour. No financial terms were disclosed.

A familiar pattern has emerged since President Donald Trump returned to the White House less than three weeks ago: He makes a brash proposal, his opponents file a lawsuit and a federal judge puts the plan on hold.

It’s happened with Trump’s attempts to freeze certain federal funding, undermine birthright citizenship and push out government workers.

Now the question is whether the court rulings are a mere speed bump or an insurmountable roadblock for the Republican president, who is determined to expand the limits of his power — sometimes by simply ignoring the laws.

Although Democrats may be encouraged by the initial round of judicial resistance, the legal battles are only beginning. Lawsuits that originated in more liberal jurisdictions like Boston, Seattle and Washington, D.C., could find their way to the U.S. Supreme Court, where a conservative majority has demonstrated its willingness to overturn precedent.

“What’s constitutional or not is only as good as the latest court decision,” said Philip Joyce, a University of Maryland public policy professor.

Roughly three dozens lawsuits have already been filed, including by FBI agents who fear they’re being purged for political reasons and families who are concerned about new limitations on healthcare for transgender youth.

The spotlight on the judiciary is brighter because the Republican-controlled Congress has essentially abdicated its role of serving as a check on the presidency. Lawmakers from Trump’s party have acceded to his demands to unilaterally cut spending and fire government watchdogs without proper notice.

That leaves only the courts as a potential guardrail on the president’s ambitions.

In Seattle, U.S. District Judge John Coughenour blocked Trump’s executive order on birthright citizenship, which was intended to prevent the children of parents who are in the country illegally from being automatically considered Americans.

Coughenour described birthright citizenship, which was established by the 14th Amendment, as “a fundamental constitutional right” and he assailed Trump in scathing terms.

“The rule of law is, according to him, something to navigate around or simply ignore, whether that be for political or personal gain,” said the judge, who was nominated by President Ronald Reagan in 1981.

“There are moments in the world’s history where people look back and ask, ‘Where were the lawyers? Where were the judges?’” Coughenour added. “In these moments, the rule of law becomes especially vulnerable. I refuse to let that beacon go dark today.”

The judge had previously called the order “blatantly unconstitutional” when issuing a temporary ruling.

“I’ve been on the bench for over four decades,” Coughenour said then. “I can’t remember another case where the question presented was as clear as this one is.”

Also on Thursday in Boston, U.S. District Judge George O’Toole Jr. paused Trump’s plan to encourage federal workers to resign by offering them paid leave.

O’Toole, who was nominated by President Bill Clinton in 1995, did not express an opinion on the deferred resignation program, which is commonly described as a buyout. He scheduled a hearing for Monday afternoon to consider arguments.

“We continue to believe this program violates the law, and we will continue to aggressively defend our members’ rights,” American Federation of Government Employees National President Everett Kelley said in a statement.

The White House said at least 40,000 federal workers have already agreed to quit in return for being paid until Sept. 30.

“We are grateful to the judge for extending the deadline so more federal workers who refuse to show up to the office can take the administration up on this very generous, once-in-a-lifetime offer,” White House press secretary Karoline Leavitt said in a statement.

It’s unclear which legal battles will reach the U.S. Supreme Court, where justices can choose what cases to consider. But Trump has nominated three out of nine members, and the court has taken an expansive view of presidential power.

China announced retaliatory tariffs on select American imports and an antitrust investigation into Google on Tuesday, just minutes after a sweeping levy on Chinese products imposed by U.S. President Donald Trump took effect.

American tariffs on imports from Canada and Mexico were also set to go into effect Tuesday before Trump agreed to a 30-day pause as the two countries acted to address his concerns about border security and drug trafficking. Trump planned to talk with Chinese President Xi Jinping in the next few days.

This isn’t the first round of tit-for-tat actions between the two countries. China and the U.S. engaged in an escalating trade war in 2018 when Trump repeatedly raised tariffs on Chinese goods and China responded each time.

This time, analysts said, China is much better prepared, announcing a slew of measures that go beyond tariffs and cut across different sectors of the U.S. economy. The government is also more wary of upsetting its own fragile and heavily trade-dependent economy.

“It’s aiming for finding measures that maximize the impact and also minimize the risk that the Chinese economy may face,” said Gary Ng, a senior economist at Natixis Corporate and Investment Banking in Hong Kong. “At the same time ... China is trying to increase its bargaining chips.”

John Gong, a professor at the University of International Business and Economics in Beijing, called the response a “measured” one. “I don’t think they want the trade war escalating,” he said. “And they see this example from Canada and Mexico and probably they are hoping for the same thing.”

China said it would implement a 15% tariff on coal and liquefied natural gas products as well as a 10% tariff on crude oil, agricultural machinery and large-engine cars imported from the U.S. The tariffs would take effect next Monday.

“The U.S.’s unilateral tariff increase seriously violates the rules of the World Trade Organization,” the State Council Tariff Commission said in a statement. “It is not only unhelpful in solving its own problems, but also damages normal economic and trade cooperation between China and the U.S.”

The impact on U.S. exports may be limited. Though the U.S. is the biggest exporter of liquid natural gas globally, it does not export much to China. In 2023, the U.S. exported 173,247 million cubic feet of LNG to China, about 2.3% of its total natural gas exports, according to the U.S. Energy Information Administration.

China imported only about 700,000 cars overall last year, and the leading importers are from Europe and Japan, said Bill Russo, the founder of the Automobility Limited consultancy in Shanghai.

The response from China appears calculated and measured, said Stephen Dover, chief market strategist and head of the Franklin Templeton Institute, a financial research firm. However, he said, the world is bracing for further impact.