Nikola has revealed that it will start to liquidate the assets of battery manufacturer Romeo Power despite paying $144 million for the company last August.
It was just 11 months ago that the alternative-fuel truck manufacturer decided to purchase Romeo Power for $144 million in stock to allow it to start making battery packs of its own. At the time of the deal, Romeo Power was one of Nikola’s battery suppliers, alongside LG Energy Solution and Proterra. Nikola had hoped that it would be able to start making its own battery packs as early as 2024.
Fast forward to July 2023 and Nikola has made the shock decision to liquidate the assets of Romeo Power.
“Nikola is discontinuing its operations with Romeo Power and has commenced a proceeding under the California Assignment for the Benefit of Creditors (ABC) statutory scheme,” a spokesperson from the truck manufacturer revealed.
It is not yet clear why Nikola has made this decision but it could have something to do with the exorbitant costs of developing and producing battery packs in-house and it may have decided it’s better to source them from elsewhere.
Read: Nikola Cutting 270 Jobs, Turns Focus On North America
News of this move comes just three weeks after Nikola said it would cut 270 jobs at its facilities in Europe and the U.S. in a bid to reduce personnel-related cash spend by more than $50 million annually, leaving it with 900 employees.
In addition, Nikola said it will concentrate more heavily on the North American market in the immediate future and is planning to sell its joint venture share to Iveco Group. It is also working to reduce the material cost of its trucks by better localizing its supply chain.
