Trevor Milton has voluntarily left Nikola Corp., the fuel-cell and electric-truck company that started in his basement, amid charges of fraud and an investigation by the Justice Department and the SEC.
Nikola announced that Milton approached the board of directors and proposed to voluntarily step aside as executive chairman and from the board. Stephen Girsky, former vice chairman of General Motors and a member of Nikola’s Board, has been appointed chairman of the board, effective immediately.
Nikola has been under fire in recent weeks, after a Sept. 10 report by Hindenburg Research, a short seller, accused Nikola of fraud. Nikola, which went public in June with a $26.3 billion evaluation, saw a more than 30% plunge in its stock price after the report came out.
Nikola issued a press statement saying Hindenburg’s goal was to “negatively manipulate the market to financially benefit short sellers, including Hindenburg itself.”
In addition, the Wall Street Journal has reported that the Justice Department and the U.S. Securities and Exchange Commission have launched investigations into the fraud allegations.
In a Sept. 11 tweet, however, Milton said, “Nikola approached the SEC, not the other way around.”
Fraud Allegations
There have been rumors about Milton overstating his truck’s capabilities dating back to his first unveiling of the truck in December 2016. A Bloomberg report in June said Milton made several comments to the crowd suggesting the Nikola One, unveiled with great fanfare, was drivable. “The statements alarmed people familiar with the truck’s capability, who told Bloomberg News recently that it was inoperable and missing key components to power itself.... Milton said key parts were taken out of the vehicle for safety reasons and that it never drove under its own power.”
For some observers in trucking, that was not surprising, given the change to a fuel cell plan from Nikola's original plans announced just a few months. Its original announcement in May said the company was creating a hybrid-electric truck-tractor with a turbine range extender whose operating costs would be half that of a diesel tractor. The proprietary turbine would have been set up to burn common fuels including diesel, gasoline or natural gas.
When it was unveiled in 2016, the Nikola One looked cool, but critics allege it couldn't move under its own power.
HDT file photo
More recently, the Hindenburg report called out the video of a 2017 Nikola One semi truck moving down a desert road, saying it was not driving under its own propulsion. Nikola’s response: “It was never described as ‘under its own propulsion’ or ‘powertrain driven.’”
Among other allegations, the Hindenburg report also cites a July 2020 podcast in which Milton said five of the Nikola Tre battery-electric semis, being built in a collaboration with Iveco, were “coming off the assembly line right now in Ulm Germany.” The Hindenburg report quotes a spokesperson for Bosch, another partner involved in building the trucks, saying “they haven’t made any trucks yet.” Bosch responded with a statement saying those remarks were taken out of context, and “The employee spoke only about Bosch’s own plans for the IAA industry show and H2Haul project for the European Union.”
Nikola stated that the five trucks are currently being built and commissioned in Ulm, Germany, and are pre-production builds.Milton lashed back at that allegation on Twitter with photos of the trucks being assembled in Ulm, Germany, saying, "These were planned to release later but alleged trucks didn't exist in Ulm Germany. Do these look fake? Thanks to the Ulm fab / assembly teams for showing the trolls what's up. You guys have my admiration. F@&k the haters. Well come back stronger from the lies spread about us."
Moving Forward
“Nikola is truly in my blood and always will be, and the focus should be on the company and its world-changing mission, not me,” said Milton in a press release. “Founding Nikola and growing it into a company that will change transportation for the better and help protect our world’s climate has been an incredible honor.”
In the release, Milton noted that Girsky was an early believer and supporter of Nikola, “has more than 30 years of experience working with OEM leaders, suppliers, dealers, labor leaders and national policy makers, and has served as a director of numerous public companies.”
In a letter to employees, Milton said, “You are in good hands. Mark is incredible and was handpicked to be my successor from the beginning.”
Milton continued, “We’ve built a deep bench of talent over the years, and I am confident that Nikola’s Chief Executive Officer, Mark Russell, supported by Chief Financial Officer, Kim Brady, and the rest of the leadership team will advance our goal of making Nikola the global leader in zero-emissions transportation.”
Nikola CEO Mark Russell added, “Our priorities remain unchanged and, in collaboration with our partners, we are laser-focused on executing on our strategic initiatives and laying the groundwork to become a vertically integrated zero-emissions transportation solutions provider.”
