Cars and Trucks

Nikola EV Startup’s Former Chairman Charged with Defrauding Investors

  • Trevor Milton, who founded and then served as executive chairman at EV startup Nikola, was indicted Thursday morning by the U.S. Department of Justice on three counts of criminal fraud.
  • Prosecutors allege that Milton made false and misleading statements to investors about the abilities and technology of the company’s products, allegedly cheating investors out of hundreds of thousands of dollars.
  • Nikola distanced itself from the indictment, which is only directed at Milton, and said that it is still aiming to start production of its Tre cab-over electric truck this year.

    The founder and former executive chairman of electric truck startup Nikola, Trevor Milton, has been indicted by the U.S. Department of Justice on three counts of criminal fraud for making false and misleading statements to investors. The charges, brought by the Manhattan U.S. attorney’s office, follow a year of turmoil for Milton, who resigned from the company in September 2020.

    A year ago, things were looking good for Nikola. The company was drumming up hype about its Badger pickup (pictured above), which was to be sold with electric and hydrogen fuel-cell powertrains, and was about to announce a partnership with General Motors, with GM engineering and assembling the Badger and taking a stake in Nikola. Soon after, however, a short seller called Hindenburg Research released a report accusing Nikola of fraud and specifically accusing Milton of lying about the technology and capabilities of Nikola’s vehicles. The fallout from the report saw Milton resign and GM back partly out of the deal, saying in November that it would only supply the fuel cells for the Badger.

    According to the indictment, from November 2019 until his resignation in September 2020, Milton allegedly deceived investors into buying Nikola shares by making untruthful statements regarding the company’s products and underlying technology. Following the indictment, Nikola released a statement clarifying that “today’s government actions are against Mr. Milton individually, and not against the company” and that “Nikola has cooperated with the government throughout the course of its inquiry.”

    Nikola

    Last November, Nikola confirmed that it had received grand jury subpoenas from the Department of Justice regarding the fraud allegations, and in February, after an external review by a law firm, the company admitted that both it and Milton had made partially or completely inaccurate statements. Prosecutors in the indictment claim these false statements caused individual investors in Nikola to lose hundreds of thousands of dollars.

    Milton had previously tweeted that he would stand up against “false allegations” before deleting his Twitter account in September of last year and vanishing from the public eye. In its statement, Nikola said it is “focused on delivering Nikola Tre battery-electric trucks later this year.” The Tre is a cab-over semi truck that Nikola claims will have a 753.0-kWh battery and 350 miles of range, with production to begin this year and a hydrogen fuel-cell powertrain joining the lineup in 2023. Nikola’s stock prices dropped 10 percent in pre-market trading today following news of the indictment.

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