Nikola Motors, once hailed as a pioneering electric truck startup, crumbled after a damning report by Hindenburg Research revealed its fraudulent practices. The company, which had grown to a staggering $30 billion valuation, was built on promises of revolutionary hydrogen-powered trucks that never truly existed.

Hindenburg's Revelations: A Startup Built on Lies

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Hindenburg Research, known for its investigative reports that expose corporate fraud, turned its attention to Nikola Motors, an American startup founded in 2014 by Trevor Milton. The company had garnered massive attention and investment by promising to revolutionise the heavy-duty commercial vehicle industry with its Nikola One truck, purported to run on hydrogen fuel cell technology. However, as Hindenburg uncovered, the reality was far from the grand vision Milton had sold to the world.

The Early Deceptions of Trevor Milton

Trevor Milton's journey began in Utah, where he was born in 1982. After experiencing poverty and personal loss, including the death of his mother to cancer, Milton was determined to achieve success. However, his business ventures were marred by dishonesty from the start. His first company, a security alarm business, was sold for $300,000, but the buyer later discovered they had been deceived, as the product did not work as promised.

Undeterred, Milton continued to pursue business opportunities, including an online advertising venture that failed to take off. Eventually, he entered the trucking industry, despite having no experience in the field. His initial endeavor, a company called dHybrid, aimed to convert diesel engines to run on natural gas. Though he received $2 million in funding, the venture failed to deliver on its promises, with only five poorly functioning trucks delivered out of the ten planned.

The Foundation of Nikola Motors: A Mega Scam Begins

In 2014, Milton founded Nikola Corporation with the ambitious goal of producing heavy-duty trucks powered by natural gas. However, the company's focus soon shifted to hydrogen fuel cell technology. Milton announced plans to produce 5,000 Nikola One trucks by 2016, but by that year, the truck was nothing more than a steel frame on wheels, devoid of any hydrogen-powered capabilities.

In a desperate attempt to restore confidence, Nikola released a video in early 2018 showing the Nikola One truck apparently driving on a road. The video, however, was a carefully staged deception—the truck was towed to the top of a hill and then rolled down, creating the illusion of a functioning vehicle. Despite growing skepticism, the company continued to attract investors, even purchasing 389 acres of land in Arizona for a factory that was never built.

The Stock Market Listing and the First Signs of Trouble

In March 2020, Nikola Motors went public through a reverse merger with VectoIQ Acquisition Corporation, a move that allowed the company to avoid the scrutiny of a traditional IPO. The stock market listing catapulted Nikola's valuation to $30 billion, surpassing that of established automotive giants like Ford, despite having never produced a single functioning truck.

Milton continued to make bold claims, including plans to produce hydrogen at a lower cost than competitors, but these claims were further undermined when his brother, Travis Milton, was appointed as director of hydrogen production—despite having no relevant experience.

Hindenburg's Bombshell and the Collapse of Nikola Motors

Nikola's charade began to unravel on September 10, 2020, when Hindenburg Research published a report labeling the company as an "intricate fraud." The report included testimony from Nikola's former chief engineer, Kevin Link, who confirmed that the Nikola One truck was a non-functional prototype. The damning revelation that the video of the truck in motion was staged by rolling it downhill was particularly damaging.

Following the report, Nikola's stock plummeted, losing nearly 90% of its value. Trevor Milton, who had promised to repay investors, instead deleted his social media accounts and disappeared from the public eye. Subsequent investigations confirmed Hindenburg's allegations, leading to Milton's arrest and a 20-year prison sentence in October 2022 for his role in the fraud.

The rise and fall of Nikola Motors serves as a cautionary tale of how unchecked ambition and deception can lead to the downfall of even the most promising ventures. The company's story is a stark reminder of the importance of transparency and accountability in the business world.