Just two weeks after announcing an extensive development and production partnership with General Motors, startup electric ute and truck firm Nikola is in crisis mode.
Its founder, Trevor Milton, quit the company overnight a week-and-a-half after allegations surfaced that he and the company have made numerous misleading statements, likely in order to drum up investment.
At the launch of the Nikola One electric semi truck in 2016, Milton stood on stage and claimed the prototype sharing the limelight “fully functions and works”.
The One was said to feature a fully electric drivetrain paired with range-extender turbine that can use either petrol, diesel or natural gas. Nikola later gave up on the turbine system in favour of hydrogen fuel cells.
The company showed a video of the truck seemingly driving under its own steam. Milton later claimed the One was not a “pusher”.
According to a paper by Hindenburg Research, an investment advisory firm, and a report by Bloomberg the One was not in fact driveable, but was towed to top of a remote hill and filmed rolling down.
After the allegations surfaced Milton said he “never deceived anyone”, and the company “never claimed” there was a “fuel cell in the truck”. It’s said the key components were taken out of the truck for safety reasons.
Other pronouncements from the company and its founder are also alleged to be false. These include having a solar array on the roof of Nikola headquarters, making its own inverters, or having the technology to cut hydrogen production costs by around 80 per cent.
It should be noted Hindenburg has shorted Nikola, so it stands to make a profit if the electric automaker’s stock price goes down.
After announcing its deal with GM earlier this month, Nikola’s market valuation briefly soared above Ford’s. In exchange for a 11 per cent stake in Nikola, the startup automaker will outsource engineering and production of the electric Badger ute to GM.
The General will also supply the batteries and hydrogen fuel cell systems for the Badger, and all of Nikola’s trucks sold outside of Europe.
In a statement released by Nikola overnight, Milton said he decided to “volunteer to step aside” because “the focus should be on the Company and its world-changing mission, not me”.
Milton will be replaced as executive chairman by Stephen Girsky.
Girsky joined Nikola’s board when his VectoIQ advisory firm and “blank cheque” company merged with Nikola to enable the startup automaker to list on the stock exchange without having to go through rigourous regulatory filings.
Prior to this Girsky was a vice chairman of GM, and helped to steer the firm out of bankruptcy in 2009.
Despite the allegations of fraud and Milton’s departure from Nikola, GM looks as though it will push ahead with the planned tie-up.
In a statement to Jalopnik, GM said, “We will work with Nikola to close the transaction we announced nearly two weeks ago to seize the growth opportunities in broader markets with our Hydrotec fuel cell and Ultium battery systems, and to engineer and build the Nikola Badger”.
