Was Nikola Motors founder Trevor Milton a “con man,” or just overly enthusiastic?

A jury in U.S. District Court in Manhattan apparently agreed with the prosecutor that it was more of the former. Milton was convicted of one count of securities fraud and two counts of wire fraud, although acquitted on an additional count of securities fraud, for using falsifications to pump up the value of the company on Wall Street. The judge allowed Milton to remain free on a $100 million bond until sentencing in January.

“Trevor Milton is a con man,” said assistant U.S. attorney Jordan Estes in summarizing the government’s case. “He lied to investors to get their money, plain and simple.”

Milton defense lawyer Marc Mukasey, while admitting that Milton sometimes spoke in the present tense about things Nikola hoped to achieve in the future, compared him to an overenthusiastic parent who brags about his child.

The fuel-cell and electric-truck company was born in 2015 in Milton’s basement. By late 2016, Milton presided over a much-anticipated unveiling of a futuristic-looking truck. At the time, the plans were for the electric drive system to be powered by a combination of hydrogen fuel cells, lithium-ion batteries and regenerative braking. Milton said the truck would be in production by 2020, with an expected annual build rate of 50,000 units.

The truck was nowhere near production by 2020, but Nikola went public that year by merging with a special purpose acquisition corporation, or SPAC, called VectoIQ Acquisition Corporation.

“The deal with the so-called blank-check corporation allowed Nikola to avoid some of the regulatory scrutiny usually applied to initial public offerings,” explained the New York Times.

Hindenburg Alleges Nikola Falsehoods

Nikola shares peaked near $80 in June 2020. However, investment firm Hindenburg Research issued a report accusing him lying about the company’s technology. The Hindenburg Research report made a series of claims against Nikola. The report was announced as the company announced a partnership with General Motors to produce the Badger zero-emissions pickup.

Nikola said the report was inaccurate and called it “a hit job for short-sale profit driven by greed.”

The Hindenburg report cited a July 2020 podcast in which Milton said five of the trucks were “coming off the assembly line right now in Ulm, Germany,” though a spokesperson for Bosch, the manufacturing partner building the trucks, confirmed that “they haven’t made any trucks yet,” according to Hindenburg. Bosch said the report took comments from the Bosch employee taken out of context, and Nikola responded that the five trucks were currently being built and commissioned in Ulm as pre-production builds.

The Hindenburg report also took Nikola to task for overstating agreements with Anheuser Busch and Republic Services, when in fact those companies are not obligated to purchase any vehicles.

One of the most reported falsifications the report pointed to was an ad where a Nikola truck was rolled down an incline to make it look like a working prototype. Mukasey dismissed the video as mere “special effects,” telling the jury that it’s “certainly not a crime to use special effects. Otherwise the government would have to indict the Energizer Bunny.”

Nikola Today

Milton resigned as executive chairman a few weeks after the Hindenburg report.

Since then, the company has continued to develop zero-emission trucks in his absence, in partnership with European truck maker Iveco. Nikola started production of the battery-electric Nikola Tre at a new plant in Coolidge, Arizona, in March. In September, Nikola and Iveco announced at the IAA commercial vehicle show they were commercially launching the European Nikola Tre battery-electric vehicle and unveiled the European Nikola Tre fuel cell electric vehicle (FCEV) beta version.