AsianFin -- Nikola, the Tesla in trunk sector, is considering filing for bankruptcy, marking a dramatic turn for the electric truck maker that once soared as a Wall Street favorite before facing legal and financial turmoil, according to sources familiar with the matter.

The company has reportedly engaged law firms and financial advisers to explore a potential Chapter 11 filing, which would provide protection from creditors as it grapples with a severe cash crunch. However, sources caution that no final decision has been made, and the company is still weighing its options.

In response to inquiries, a Nikola representative stated that the company is evaluating various strategies, including new financing as part of a broader financial restructuring.

News of the potential bankruptcy sent Nikola’s shares tumbling as much as 28% to 54 cents in after-hours trading on Thursday. The Wall Street Journal first reported on the possible filing.