Nikola isn’t a new name in the automotive field. For years now, the startup has promised to change the world with fuel cell- and electric-powered semi trucks, and in recent months, investors bought in as the search for the next Tesla heats up. After years of it hyping proprietary technology such as “game-changing” battery tech, cheap hydrogen fuel and more, a new report alleges that the company has never had much at all.
Instead, the startup is alleged to have used smoke-and-mirror tactics to land big-name partners from Bosch to General Motors. A bombshell Thursday report from forensic financial research firm Hindenburg Research compiles evidence that it says shows, at a minimum, that Nikola and its founder Trevor Milton haven’t been entirely forthcoming about its trucks or its powertrain systems.
One key thing to note before we detail the findings: Hindenburg disclosed that it’s a Nikola short-seller, meaning it may profit if Nikola stock performs poorly. (On its website, Hindenburg notes that its work has prompted executive resignations and investigations that led to SEC charges.) The research firm didn’t immediately respond to Roadshow’s request for comment.
Milton, though, quickly took to Twitter, calling the report a “hit job.”
A Nikola spokesperson told Roadshow, “Nikola has been vetted by some of the world’s most credible companies and investors. We are on a path to success and will not waver based on a report filled with misleading information attempting to manipulate our stock.”
On Friday, after teasing a point-by-point rebuttal to the report, Milton tweeted Nikola retained outside council and contacted the SEC. “I want you to see how I have addressed each point, but it will have to wait to be until the SEC finishes their work,” he said in part, while adding the allegations are “false” and “deceptive.”
Hindenburg compiled a detailed account of Nikola’s early days, predating the company itself and delving into Milton’s past business doings. Hindenburg accuses Milton and the company of “intricate fraud” and supplies recorded phone conversations, text messages, emails and legal documents to back up its claims. This follows a Bloomberg report, which Hindenburg corroborates, that spilled details on how it says Milton and the company overstated the Nikola One’s abilities.
A trail of proprietary technology that never existed, overinflated contract deals and exaggerations of employee experiences propelled Milton to early success, Hindenburg says its evidence shows. After he established Nikola, Milton worked to over-hype and over-promise its upcoming semi truck’s capabilities and passed off pieces of equipment, such as inverters, as components designed in-house, it alleges.
The Nikola One, for example, was never a running truck, according to the report’s evidence. Despite Milton’s declarations that the truck was “not a pusher” and moved under its own power, no evidence suggests that’s the case. In fact, a video used to demonstrate the truck moving at what looked like highway speeds was reportedly filmed on a downward grade with camera tricks. The semi rolled with gravity’s momentum, not under its own power. Infotainment displays, which Roadshow’s Emme Hall viewed in person at the One’s reveal, were powered by a concealed cable. The rest of the technology was a mockup, and internals were put together using basic hardware-store parts, according to the report.
Perhaps worse, Hindenburg says the One never had a hydrogen fuel-cell powertrain at all. A body shell hid natural gas turbines, according to the report’s sources, which include former Nikola employees. Instead, Nikola stenciled hydrogen decals on the truck body to inflate the suggestion that a game-changing fuel cell powertrain resided underneath, according to photo evidence supplied in the report.
The report continued to detail strange back-and-forths over the “game-changing battery cell technology” Nikola was meant to announce this year. The technology was tied to Nikola’s pending acquisition of a firm called ZapGo, but Nikola discovered the technology didn’t exist at all; Nikola sued the company after investing $2.2 million for the rumored battery tech.
The company also hasn’t built a single Tre semi in Europe with partner Bosch, the German company confirmed in the report. This contradicts earlier statements from Milton, who said five of its Tre electric semis rolled off the assembly line this past July. Bosch told Roadshow on Friday, however, “Specific instances in the report quoting a Bosch employee were taken out of context. He spoke only about Bosch’s own plans for the IAA industry show and H2Haul project for the European Union.”
One massive pillar Nikola has been banking on for future success is the company’s ability to produce or source hydrogen fuel at a cheap price. In the past, Milton claimed Nikola produced its own hydrogen at just $3 a kilogram — an incredible feat. He cited a standardized hydrogen station as the factor that drove the cost down, but according to the report, Nikola did not (and still does not) operate a hydrogen production facility. A standardized station is irrelevant if there isn’t actually any hydrogen at all. Milton admitted this summer the company doesn’t make any hydrogen itself.
The executive behind Nikola’s rollout of hydrogen infrastructure is the former CEO and general manager of a golf club in Idaho. Its director of hydrogen production is Milton’s younger brother, Travis, whose previous experience doesn’t involve hydrogen at all; his LinkedIn profile shows he was self-employed and largely worked on driveway pouring. The firm’s chief engineer has a background in software development and pinball-machine repair.
The report also claims to shed light on Nikola’s order books. The company has long said US Xpress makes up the majority of its orders, with 14,600 trucks. Hindenburg’s investigation into US Xpress’ financials revealed it has $1.3 million in cash, hardly enough to cover a $3.5 billion order for Nikola semis. The report also details the end of a relationship with Ryder to service trucks for Anheuser-Busch and clarifies that a deal for 2,500 trucks for Republic Services is for electric trucks, not hydrogen-powered vehicles. What remains unclear is what exactly happened to 7,000 preorders supposedly backed by deposits for the One. In 2018, Nikola’s chief financial officer left the company and sued. One month after the lawsuit, Nikola said it would refund all One preorders. The related legal documents remain sealed to date, and Nikola abandoned development of the One and instead touted its Two semi.
Indeed, Hindenburg’s alleged evidence pointing to Nikola lacking its own hydrogen or battery technology would seem to give the company’s recently announced GM partnership more legs. It’s not clear what GM actually gets out of the deal, other than the ability to cash in on snazzy startup hype. Nikola, meanwhile, actually gets hardware — batteries for its promised electric pickup truck and fuel-cell tech for its semis. Nikola surely wouldn’t need the hardware if it’s developed the tech in-house over the past five years.
A GM spokesperson simply told Roadshow, “We are fully confident in the value we will create by working together. We stand by the statements we made in announcing the relationship.”
Originally published Sept. 10.
Update, Sept. 11: Adds new information from Milton in sixth paragraph and Bosch statement in paragraph 12.
This was originally published on Roadshow.