On the first day of December, 2016, dressed in a button-down shirt and a pair of chinos, Trevor Milton strode across the stage at a Salt Lake City convention hall. Behind him, completely obscured by a huge sheet of white, silky fabric, sat an enormous hydrogen-powered semi truck. As his presentation drew to close, Milton addressed his critics: “For every doubter out there that said there’s no way this is true, how can that be possible? We’ve done it. It’s my pleasure to actually let you guys enjoy the night. See the truck. Know it’s real.”
But according to a criminal complaint, just a few weeks before this presentation, the chief engineer of Milton’s company, Nikola, let Milton know the unfortunate reality — there was no way their truck would be functional for the event — and recommended the grand public unveiling be postponed. But Milton pushed ahead with his plans anyway.
To ensure the truck had a reliable power supply — since the natural gas turbines that were supposed to power the truck were non-operational — the team from Nikola allegedly engineered a work-around. Per prosecutors, they snaked a power cord through the floor of the stage and plugged it into the truck. Essentially, they plugged the truck into a wall outlet. The semi had also supposedly been towed onto the stage with a winch, and someone from Nikola later added stencils on the truck body that read “H2” to indicate it was a hydrogen-powered vehicle — a clean green machine.
But a subsequent investigation claims the list of problems with the truck only grew from there. The hydrogen fuel cell hadn’t been installed yet, nor had the hydrogen gas storage tanks. The gearbox hadn’t been assembled. The compressor and turbine hadn’t been commissioned. And the state-of-the-art display monitors in the cabin were off-the-shelf tablets that had been added to the dashboard at the last minute and weren’t connected to anything.
Still, Milton stood on stage at the grand unveiling and encouraged the crowd to come up and see for themselves. “Touch it, feel how sturdy it is,” he boasted. “You’re going to see that this is a real truck. This is not a pusher.”
He didn’t need all of them to trust him, but he needed enough of them to believe in order to get the investment dollars he required. And the money did come. In 2020, Nikola became the third largest vehicle company in the U.S. with a stock valuation of $29 billion — all without ever delivering a single truck.
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Veteran automotive journalist Patrick George remembers when Nikola came crashing onto the auto industry scene in 2016. “What we wrote at Jalopnik [where George was the longtime editor-in-chief] at the time was that they came out of nowhere, and that’s really apt,” recalls George, who is now the editorial director of MEL’s sister sites The Drive and Car Bibles. “They were talking about hauling big trucks for thousands of miles on electric power. They were talking about natural gas turbines for a while. I can’t remember at what point they talked about hydrogen, but it was really sort of like, ‘Who the hell are you, and what is this exactly?’”
Founded by Milton in 2015, Nikola was originally positioned as a manufacturer of semi-trucks that would be powered by new, cutting edge alternative fuels. Milton rode the spirit of the times and capitalized on the excitement in the EV space largely led by maverick carmaker Elon Musk. He even changed the name of his company, once called Bluegentech LLC, to Nikola Corporation after the inventor Nikola Tesla. Since Musk’s company already laid claim to the electrical genius’ last name, Milton settled for his first. This association connected the two companies — if only by allusion to the shared namesake.
But at that point, no one had claimed the EV space specifically for America’s top-selling vehicle: the truck. And Milton planned to be that person. First, though, he needed to build some hype. On May 9, 2016, the company announced itself to the world with a press release and an eye-arresting photo of what looked like a futuristic, cartoon semi-truck:
SALT LAKE CITY, UT (May 9, 2016) — Nikola (pronounced Neek-oh-la) Motor Company (NMC), named after the famous electrical engineer Nikola Tesla, was quietly formed by Founder and CEO Trevor Milton years ago to design and manufacture electric vehicles, energy storage systems and electric vehicle drivetrain components. With the first working prototypes displayed to the public later this year, the company will launch a 2,000 horsepower, electric semi-truck, dubbed ‘Nikola One,’ and a 520 horsepower, 4×4 electric UTV with a code name of ‘Nikola Zero.’”
Shortly thereafter, Nikola had another big announcement to make. On August 1, 2016, the company issued another press release, this time claiming the startup truckmaker had done the impossible. As the press release explained: “Nikola has engineered the holy grail of the trucking industry. We are not aware of any zero emission truck in the world that can haul 80,000 pounds more than 1,000 miles and do it without stopping. The Nikola One requires only 15 minutes of downtime before heading out for the next 1,000 miles.”
In anticipation of the doubters and critics, the release came preemptively equipped with an answer: “When asked why no one had accomplished this before, Milton said, ‘It requires a specific zero emission refinement process of fuel and gutsy engineering and product execution. A traditional manufacturer would have to partner with an oil company, environmental group, electric vehicle engineering firm, a broad spectrum of suppliers and a world-class consulting firm to have figured it out. At Nikola, all of our development and talent is under one roof.’”
Federal prosecutors would later argue that this statement was demonstrably false. Nikola hadn’t achieved what it claimed, nor did it have all their development under one roof. It didn’t even have a fully-functional prototype. Instead, Milton was quickly and quietly attempting to cobble together a hydrogen fuel-cell/EV truckmaker through acquisitions and investment — not that he was fooling the auto press anyway.
“If auto journalists are good at one thing, it’s that they understand, for the most part, how car manufacturing works, and they understand how this stuff goes to market,” George says. “I have a saying that I’ve always used throughout my career: ‘Making cars is hard.’ It’s dumb to say, but it’s the truth. If anybody could do this, there’d be a hell of a lot more of them out there. You’re talking about the most regulated consumer product you can buy, plus the production side of it which is massively complicated. That’s before you even get to the sales channel, the distribution model.”
Nonetheless, Milton was determined — he would bring his truck to market, one way or another.
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After the 2017 grand unveiling, pressure began mounting for Nikola to show its truck in motion. So, that’s what Milton did with the company’s “Nikola One in Motion” video.
On January 25, 2018, per an SEC complaint, Milton posted an edited clip of the semi-truck driving through the desert. Only, the semi-truck was still non-operational. So Milton found a long, sloping hill in the middle of nowhere and had the truck towed up the hill. It was filmed at an angle as it rolled downhill to make it look like it was being driven across flat earth. When he got the footage back to the editing bay, Milton allegedly had the editor push the lie along by speeding up the footage so it ran three times as fast.
He drafted a caption for the video and released it on YouTube and social media:
A week later, Milton played that same video for Arizona Governor Doug Ducey at a public event. “Today, I’m proud to announce that Nikola Motor Company is coming to Arizona,” Ducey proclaimed. “This is a HUGE announcement! This is a manufacturing headquarters of hydrogen electric semi-trucks that will be moving to our state.”
Along those lines, in April 2019, Milton would claim that it wasn’t just his vehicles that were cutting edge, but the facilities he was building them in, too. “We don’t just build the trucks with zero emissions at our factory, we have the only off-the-grid headquarters — that we know of — completely off of hydrogen, battery and solar,” he said at the time. “We have 3.5 megawatts of solar up on the roof producing about 18 megawatts of energy a day in our headquarters, and we’re storing 10,000 kilograms of hydrogen and using fuel cells as energy backup and batteries as energy sources, as well. Our company is truly one of the most innovative companies in the world!”
But when BizJournal visited Nikola’s newly-constructed headquarters in Phoenix two months later, there were no solar panels on the factory’s roof. They were told they would be installed soon. (According to Google Earth, there are still no solar panels on the roof at Nikola HQ.)
On November 19, 2019, Milton had another big announcement to make. Nikola planned to acquire ZapGo, a battery company that would be key to Nikola’s meteoric rise. The only trouble was Milton seemingly hadn’t done his due diligence — ZapGo’s president, Charles Resnick, had recently been busted for scamming NASA into paying for the services of sex workers he’d charged to his expense account. He later pleaded guilty.
Once again, Milton pressed on. Like Musk, he got busy on social media and hit the podcast circuit. On May 5, 2020, during an appearance on the Rise of the Young podcast, he told the host, “There’s two people in this world that know EVs better than anyone, and that’s Elon and myself. There’s no one in this world that… I can go into any meeting with Volkswagen, Daimler, Volvo. You could put 30 PhDs in that room, and I would run circles around every one of them.”
Meanwhile, behind the scenes, Milton had named his brother, Travis, as the company’s Director of Hydrogen Production/Infrastructure. Prior to that job, Travis’ employment history consisted of working as a day laborer pouring driveways and laying flooring in Hawaii. Now he was in charge of the rollout of Nikola’s planned network of 700 hydrogen gas stations across America.
Milton, however, didn’t seem to think that this would be an issue for investors and employees when he attempted to take Nikola public in June 2020. Most companies make their appearance on the stock market after an IPO. Not Milton. Instead, he backed into the stock market through a unique form of merger called a SPAC. Lucky for him, the fan boys and retail investors Milton had been hoping to attract came rushing in, looking to buy the new hot EV company’s stock. Overnight, Milton became a newly minted multi-billionaire.
Then, his priorities shifted. According to the criminal complaint, Milton became laser-focused on his company’s stock price. If it dipped, he allegedly frantically harassed his executives to go public with a press announcement to spike the share price. Concurrently, he also loved that so many amateur investors were buying Nikola. That June, Milton told a senior executive at Nikola that he’d seen that 36,000 new Robinhood users had purchased Nikola stock in one day. The executive responded by informing Milton that he’d received so many calls “from retail investors today that have no clue about Nikola, other than their friends told them to buy. A lot of hype out there with retail investors.”
“That’s how you build a foundation. Love it,” Milton responded.
On September 8, 2020, Milton had another huge announcement to make: Nikola had partnered with General Motors for a new EV/hydrogen fuel cell vehicle manufacturing program, and GM was set to receive $2 billion in Nikola stock, or an 11-percent stake in the company.
Two days after that, though, it all came crashing down. To start, investment research firm Hindenburg Research published a massively damning report on Nikola, claiming that the entire company was “an intricate fraud built on dozens of lies over the course of its founder and Executive Chairman Trevor Milton’s career.” The report laid bare how the alleged fraud had been allowed to fester: “Trevor has managed to parlay these false statements made over the course of a decade into a ~$20 billion public company.”
Next, the stock price plummeted. Investors panicked and fled. Within little over a week, Milton had resigned as CEO of the company he founded. The SEC and Department of Justice came calling soon thereafter. In July 2021, the DOJ charged Milton with three counts of criminal fraud and two counts of securities fraud. The SEC also filed civil securities fraud and wire fraud charges. While Milton’s legal team has maintained that he’s innocent of all charges, late last year, Nikola reached a deal with the SEC, promising to pay $125 million to resolve the charges of defrauding investors.
And yet, as the saying goes, a new sucker is born every day — especially in the ever-more-crowded EV market. “It’s the same reason that Tesla has such an insane valuation,” George explains. “Investors look at this, and they think it’s the future. And when you’re investing in a company, you’re not investing in what it’s doing now, you’re investing in what it’s doing long-term. With all of these futures to consider, there’s a lot of valuations that are just way off-the-charts and don’t deserve to be.”
What do the many futures hold? Could there be a comeback for Milton and Nikola? Will a new EV truck disrupt the market and win over investors? Will we forget about land vehicles altogether and turn our eyes to the sky and EV aircraft instead?
Whatever the case, it’s probably worth looking under the hood first.