Founder Of Zero-Emissions Truck Startup Resigns After Fraud Allegations

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Trevor Milton, the founder of Nikola, speaks during a presentation in Turin, Italy December 2, 2019. Milton resigned as executive chairman over allegations that he made misleading claims about the company’s technology. Milton has denied the accusations.

Massimo Pinca/REUTERS

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Massimo Pinca/REUTERS

Environment And Energy Collaborative
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Like Tesla CEO Elon Musk, Milton had a vision: in his case, of fuel-cell powered big rigs transforming the shipping industry. But did he have the technology to make that vision real? And until the technology is proven, where’s the line between optimistic hype and deception?

Bloomberg reported that Milton had previously exaggerated the functionality of Nikola tractor trailers. This month a short seller, Hindenburg Research, went further, calling Nikola «an intricate fraud built on dozens of lies» and accusing Milton of misleading partners, investors and customers by, among other things, pretending that non-functioning prototypes were actually viable products.

As a short seller, Hindenburg Research stands to profit if Nikola stock plummets. The company says the allegations are false and misleading.

In one eye-catching allegation, Hindenburg says that a video that appeared to show a Nikola big rig driving actually showed it rolling down a large hill. Nikola did not deny that the truck in the video was rolling downhill. However, it maintains that Nikola has since created «real working hydrogen fuel-cell powered semi trucks.»

Electric Truck Startup Steps In Where Other Automakers Left Off

This summer Nikola had a splashy debut on the stock market in June, thanks in part to its announcement of an electric pick-up truck — a big departure from its focus on semis, but one that was popular with investors.

The stock had rocky performance after that, but got a boost this month after GM announced it would build that pick-up truck, called the Badger, using GM batteries and fuel cells. Nikola would handle marketing and sales.

GM says it will «work with Nikola to close the transaction» move forward with those plans, despite Milton’s departure.


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