New scandal on the electric car market: Nikola Corporation is accused of fraud

New scandal on the electric car market: Nikola Corporation is accused of fraud

The rapid development of the electric car industry does not do without scandals, which is understandable: the price of the entrance ticket is much lower than in the case of internal combustion engines, and the flight for imagination in terms of design and capabilities is simply huge.

That’s why different startups in this industry (and much more – in related) are growing day by day. But not everyone reaches the stage of mass production. It may happen that the advertised Nikola Corporation startup, which has promised to put electric and hydrogen tractors and an electric pickup truck on the line, is just a fiction and a simulation of innovation to obtain investments that are then cashed in.

Hindenburg Research, an analytical company, made an exposé on Nikola. According to the report, there were massive cases of Nikola’s tampering and outright lies “about its technology”. Analysts say they have gathered a vast body of evidence of counterfeiting based on phone records, text messages and emails.

“We have never seen such a level of deception in a public company, especially one of this size. Trevor [Trevor Milton – Nikola’s CEO] has managed to turn false statements made over a decade into a public company worth about $20 billion,” that’s how the report begins. And then, directly, the facts.

For example, a video called “Nikola One in Motion,” which showed a Nikola One truck moving on the road at high speed, was called a “carefully designed production”: Nikola workers towed the truck to the top of a hill on a remote stretch of road and just filmed it rolling down the hill.

Last October, Nikola promised a revolution in the battery industry as it planned to buy some new technology from another company. But the deal broke down when Nikola realized that, first, the technology was completely useless, and second, the battery company president had cheated … NASA a few months earlier. Interestingly, after the whole truth about the “miracle technology” was revealed, Trevor continued to publicly promote it.

New scandal on the electric car market: Nikola Corporation is accused of fraud

Or here’s another fact. In one of his presentations, Trevor claimed that his company had managed to reduce the cost of producing hydrogen by 81 percent compared to competitive solutions, and that Nikola was already producing hydrogen (the company had planned two versions of its truck – a purely electric truck and one with a hydrogen propulsion system that would produce electricity on board itself). But later Nikola admitted that it didn’t produce any hydrogen at all.

Trevor appointed his brother Travis as “Director of Hydrogen Production/Infrastructure,” but Travis had previously worked … pouring concrete access roads and performing various subcontract work to repair houses in Hawaii.

Allegations of ownership of Nikola’s energy production assets are also fictitious. Trevor claimed that 3.5 megawatts of solar panels were installed on the roof of Nikola’s headquarters, but aerial photographs of the roof show that these panels do not exist. Nikola also reported owning its own gas wells, but these are not reflected in the company’s assets.

Trevor claimed that Nikola develops all of the key components of its promising electric vehicles on its own, but in reality, they appear to be either purchased from third parties or simply licensed. For example, Nikola buys inverters from Cascadia: in a video showing the inverters allegedly made in-house, Nikola concealed the Cascadia sticker with a piece of paint tape.

In general, there’s more than enough data to cast doubt on Nikola, its design and guidance. Not surprisingly, after the publication of the report Hindenburg Research shares of Nikola Corp. fell by 13%. However, it should be noted that Hindenburg Research itself can benefit from this situation, because it owns shares of Nikola and has a short position on the stock exchange. Analysts have indicated this in their report.

Along with the shares of Nikola went down and General Motors shares, but not so significantly – by 5.6%. Earlier, both companies have agreed to jointly produce electric cars. It is logical that the negative news about one (and the negative in the report, as can be seen, enough) affected the other.

In Nikola itself, all accusations of lies and falsifications are denied. “Nikola has been audited by several of the most reputable companies and investors in the world,” said the manufacturer Bloomberg News. “We are on the road to success and will not falter because of the report, which contains misleading information to manipulate our shares.


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