Nikola Corp.’s plan to sell its business in bankruptcy is complicated by the federal government’s expected retreat from policies and incentives that were meant to boost electric-vehicle sales.

Judge Thomas M. Horan raised questions about the outlook for the electric-vehicle industry during the company’s first day in bankruptcy court on February 20. In particular, he questioned whether the industry would largely be built out through private investment instead of relying on assistance from the government.

“That’s the question that all the potential acquirers of this business are trying to answer,” said Joshua D. Morse, a company attorney. It’s challenging to “time” the new U.S. administration’s policies, he added.During conversations with prospective buyers, a major sticking point was the uncertainty surrounding auto imports, Morse said.

Given President Donald Trump’s plans to impose tariffs on automobile imports of around 25%, some competitors developing hydrogen trucks overseas still figuring out whether to sell to the U.S. market, Morse said. In addition to repeatedly voicing his support for domestic automakers, Trump has been rolling back U.S. subsidies for electric vehicles.

On top of grappling with a punishing environment for EVs, Nikola also dealt with weak sales and cycled through CEOs in the wake of a fraud scandal — ultimately leading to its demise.

Nikola is still looking for opportunities to sell itself as a going concern, Morse told the court. It has received a number of queries from potential buyers after filing for bankruptcy, he added. If a going-concern sale fails to materialize, the company will sell its factory and other assets piece by piece.

Morse expects it would be the “easiest” to sell the facility in Coolidge, Arizona. Given the potential tariffs, buyers could be interested in purchasing a site in the U.S., he said. In court documents, Nikola listed total funded debt and lease obligations of $98 million. It has about $47 million of cash on hand.

Nikola owes the U.S. Securities and Exchange Commission — No. 1 on the roster of the largest unsecured creditors when the company filed bankruptcy — about $80 million.

The case is Nikola Corp, number 25-10258, in the U.S. Bankruptcy Court for the District of Delaware.