Lucid Motors Acquires Nikola’s Arizona Factory and Assets in Bankruptcy Auction

On April 7, electric car startup Lucid Motors won a bankruptcy auction. They outmaneuvered much larger players to buy Nikola Corporation’s Arizona factory and other desirable assets. The electric vehicle manufacturer promised about $30 million in cash and non-cash considerations to win the deal. This deal folds Nikola’s manufacturing facility into the agreement. It identifies the lease for its corporate headquarters in Phoenix, Arizona, certain machinery and equipment, and inventory.

Nikola’s woes have deepened since it sought court protection from creditors in February. The new company, called Hyzon Motors, aims to deliver hydrogen-powered electric vehicles. Yet it has gone through the ringer, including a 2022 fraud conviction of its founder, Trevor Milton. Milton was pardoned by President Trump in March. His legacy and the weight of all of his past wrongdoings still largely govern the company’s culture. In an unusual move, Nikola convinced the court to prevent Milton from inspecting its factory and other assets in person during the bankruptcy proceedings.

Lucid Motors is focused on creating the most advanced luxury electric vehicles. So, contrary to Nikola, they have not ventured into the hydrogen-powered space. Despite this difference in focus, Lucid’s acquisition strategy aims to leverage Nikola’s existing infrastructure and talent pool. To facilitate that, the company plans to make offers of employment to over 300 Nikola employees who have since left as part of our integration process.

The bankruptcy auction raised questions about the future of Nikola’s operations and its ability to recover from its financial troubles. The judge overseeing the public bankruptcy case has imposed a timeline. Any member of the public who wishes to oppose the sale can submit objections to the BLM sale up until April 11.

Despite its stock dropping 80%, Lucid Motors continues to forge ahead with its expansion plans in Arizona. The inclusion of Nikola’s assets could have a major impact on its money-losing business model. The acquisition is another sign of Lucid’s strategy to scale its operations quickly and efficiently, as it continues to maneuver the wide complexity of the electric vehicle landscape.