By on September 21, 2020

It’s been a wild ride for Nikola, from being highly valuedperhaps overvalued – by Wall Street, to partnering with GM, to being accused of fraud, to founder Trevor Milton voluntarily stepping down today.

Milton, who was hailed as the next Elon Musk not long ago, is stepping aside less than two weeks after Hindenburg Research, a short-selling firm, published a long article/blog post accusing Nikola of fraud. Milton and Nikola pushed back, saying the report contained inaccuracies, but Milton is resigning as executive chairman and giving up his spot on the board anyway.

The board has accepted his resignation.

Nikola stock slipped 30 percent in pre-market trading. As I write this, around 9 am CST Monday, it’s down about 16 percent.

Ed. note: GM sent over a statement shortly after we published. It’s at the end of this post.

Stephen Girksy, a former vice chairman for GM who is on Nikola’s board, is now chairman of the board, effective immediately.

“Nikola is truly in my blood and always will be, and the focus should be on the Company and its world-changing mission, not me,” Milton said in a statement. “So I made the difficult decision to approach the Board and volunteer to step aside as Executive Chairman. Founding Nikola and growing it into a company that will change transportation for the better and help protect our world’s climate has been an incredible honor.”

He also tweeted out a statement that included a line in which he declared his intent to defend himself against the allegations. The Securities and Exchange Commission and Department of Justice are reportedly investigating claims about Nikola misleading investors.

GM, of course, recently promised to help hydrogen fuel-cell truck, the Badger, and took a stake of 11 percent in Nikola. GM CEO Mary Barra has said the company did its due diligence, but the accusations of fraud, the reported investigations, and Milton stepping aside will nonetheless raise questions about GM’s vetting process.

Nikola’s stock went from $13 in the spring to $93.99 in June, before falling to $34.19 on Friday.

Nikola CEO Mark Russell put out this statement: “Our priorities remain unchanged and, in collaboration with our partners, we are laser-focused on executing on our strategic initiatives and laying the groundwork to become a vertically integrated zero-emissions transportation solutions provider,” Russell said.

Update: GM has responded. Statement: “We acknowledge Trevor Milton’s departure from Nikola and the decision of the Nikola Board to move forward. We will work with Nikola to close the transaction we announced nearly two weeks ago to seize the growth opportunities in broader markets with our Hydrotec fuel cell and Ultium battery systems, and to engineer and build the Nikola Badger. Nikola, Honda and other companies who are looking to GM’s technology as a platform for their products, represent just one part of our overall EV strategy. Our overall goal is to put everyone in an EV and accelerate adoption.”

[Image: Nikola]

 

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34 Comments on “Trevor Milton Steps Down From Nikola, Stock Sinks [UPDATED]...”


  • avatar
    Cicero

    Uh oh.

    It’s being reported now that Trevor Milton was arrested by the FBI at Sky Harbor Airport this morning.

    https://tinyurl.com/y5etpu2v

    I haven’t seen confirmation anywhere else, but if this is true GM is really going to have some egg on its face.

  • avatar

    It appears from confirmed reports that Nikola did indeed fake the promo videos of their Hydrogen Truck driving by coasting it downhill.

    Now this.

    Let me make a predication. GM will quietly announce they are terminating their relationship with Nikola.

    • 0 avatar
      Old_WRX

      “coasting it downhill”

      Nothing wrong with that. Gravity is 100% sustainable and one of the most reliable forms of propulsion. There’s still the uphill part to figure out, but 50% of the way there is nothing to scoff at.

      I always thought Nikola was nothing but a scam. Was there collusion between Nkola (or Milton)? — it seems like quite the coincidence.

    • 0 avatar
      Snooder

      Nah, no more than they’ll announce a termination of their “relationship” with Workhorse.

      The thing is that when GM says “we did our due diligence” what they mean is “we dont give a f*ck if it’s a scam. That’s not what we cared about.”

      The whole thing is just a way for GM to sell shit they already have under a different brand name so that they get that startup buzz and get to cash in on EV credits. They dont need Nikola to have any tech of their own since they just plan to repackage and resell GM tech anyway. In addition, I suspect there was also, like with the Workhorse deal, a plan to “reopen” a closed GM factory without having to pay the same union wages.

      GM gets the publicity, the scam company gets some investors and a stock bump, everyone goes home happy.

  • avatar
    Vulpine

    Nikola does have a good idea and GM does look like it could carry through with the concept. As such, I wouldn’t be surprised if GM buys out Nikola and keeps it as an EV-only brand under the corporate umbrella.

    Here’s the thing: The pickup Nikola was promoting offers a somewhat unique style which not only separates them from conventional pickups but also offers. It also opened up GM to a different battery platform which may (or may not) prove superior to the ‘skateboard’ they’re currently designing around. The potential here is that down the road, the better platform will probably be used across the board while giving them at least a few years to analyze which of the platforms is functionally better (for the moment, the LG-based platform appears questionable at best.)

    But GM also needs to get back into the commercial truck market and Nikola’s big-rig concept, especially with hydrogen fuel cells, really looks like a step in the right direction. With HFC you flat eliminate the diesel exhaust emissions while offering potentially more horsepower and torque for acceleration and speed control on grades. Moreover, if you’ve ever seen one of those big rigs ever blow their turbo under load, you will recall the massive volume of black smoke that comes out of their stack(s) simultaneous to a massive loss of power and speed. Even while not the most efficient means of motive power, it still more than doubles the efficiency of a Diesel engine while flat eliminating all of the emissions; a win-win even if still more expensive than battery power alone. For OTR trucking, I think it’s near ideal, while battery-electric is more effective for regional and route-style transport.

    Now, personally I believe Nikola was always intended as a fraud by Milton; the simple choice of name shows that his whole intent was to impact Tesla’s efforts negatively and try to taint Tesla with a more visible accusation of fraud or force them to bankrupt themselves by competing with Nikola’s supposedly quicker development. There are simply too many coincidental events in timing of the 18-wheeler and the pickup truck, along with Nikola’s lawsuit on the truck’s design patent…which itself is invalid since another company previously designed an ‘aero’ truck for BP/Shell with very similar features. The interesting thing now is that Nikola the company may have surpassed its founder’s plans and expectations and may be able to survive even as its founder goes to prison.

  • avatar
    tobiasfunkemd

    Speculation boosting Nikola’s market cap above Ford’s is just the latest sign that this market is out of it’s f**king mind. This feels very similar to the dotcom boom of the late 90’s. Even I, a self-identified bleeding heart liberal from the people’s republic of California, know that the ability to produce goods and services that are actually legitimate and in demand is the key to a functioning market economy. Nikola is destined to be a cautionary tale, in the vein of Theranos and the in terms of wtf levels of speculation, pets.com.

    • 0 avatar
      JMII

      Always amazes me that so-called “smart” people are so easily fooled by these scams. Theranos maybe be best example, nobody believed it yet they kept dumping millions into the fantasy. The fear of being left out of the next big thing like Apple or Telsa has proven the quickest way to separate people from their money.

      I had a friend who worked at eToys.com during the internet bubble, the entire operation was based on unicorns tears making pigs fly. People believed it would work, when in fact the logistics where nothing short of impossible. Later Amazon would make the business model work but only by moving at a much slower, more reasonable pace.

      • 0 avatar
        R Henry

        @JMII

        UBER has NO reasonable plan to achieve profitablity, yet investors continue to pile on to that reprehnsible organization.

        UBER investers truly deserve their upcoming haircut.

        –No..UBER is NOT the next Amazon you idiots!

    • 0 avatar
      raph

      IMO its a sincere will to see EV or alternative energy manufacturers succeed. Tesla being the poster child for it. Its no secret a lot of people hate the traditional domestic auto industry and want to see them fail so investors just back a dump truck up to the back door and shovel money into the businesses.

      Talk to some of these cats and they fully believe EV manufacturers are ahead in every facet of the game not only the motor and battery tech but chassis, body and manufacturing systems with traditional auto manufacturers hopelessly forever stuck behind.

  • avatar
    boowiebear

    Ssssssshocking.

  • avatar
    ToolGuy

    Stephen Girsky is now chairman of Nikola.

    Other GM entities for which Stephen Girsky has been given responsibility at various times:
    • Adam Opel AG
    • GM Europe
    • Saturn

    (Mary Barra is telling the truth when she says GM did its due diligence.)

    How about some TTAC from 2009:
    https://tinyurl.com/y67uye59

    [If you get a call from GM saying they are sending Stephen Girsky over to ‘help’ you, you should put your affairs in order.]

    • 0 avatar
      R Henry

      Wow… in the “I lost Million$ for my Employer” sweepstakes, Girsky is a contender! That is A LOT of failure for one career!

      • 0 avatar
        ToolGuy

        Respectfully, you misunderstand. Girsky did *exactly* what he was sent to do.

        • 0 avatar
          Vulpine

          @ToolGuy: What you’re saying is that he was sent in to shut down those operations? Because honestly Saturn was a good brand until GM Corporate started screwing them over.

          • 0 avatar
            ToolGuy

            Saturn has its own long story which has been discussed a lot here. Girsky was engaged with Saturn very late in the game.

            My current impression is that GM is not at all ‘upset’ (and likely not surprised) by the demise of another potential competitor.

            [My first ‘job’ in the automotive industry was an MBA internship with Saturn when the plant was under construction – Saturn was going to revolutionize GM. One of my last assignments with ‘old’ GM was training Saturn employees on how to do things the GM way.]

          • 0 avatar
            mcs

            @toolguy: [My first ‘job’ in the automotive industry was an MBA internship with Saturn when the plant was under construction

            That brings back memories. I was in Columbia TN very briefly while the Saturn Plant was under construction, but not for GM. Lots of MI plates in the parking lot of the hotel. Another engineer and I designed a major piece of technology on the backs of napkins in what seemed to be the only Chinese restaurant in Columbia at the time. Headed to Atlanta from there by car on back roads with a stop at Jack Daniels for a tour. That was a good trip.

    • 0 avatar
      Crosley

      (Mary Barra is telling the truth when she says GM did its due diligence.)
      ___________________________

      So if you vet a company you know is a house of cards that’s about to implode and is all smoke and mirrors, you make a big PR spectacle announcing a partnership worth billions?

      Or do you walk away and call the SEC?

      Barra and GM were blindsided, absolutely inexcusable leadership here.

      • 0 avatar
        ToolGuy

        @Crosley,

        You may be right. If JPWhite’s prediction is correct and they part ways, that would tell us one thing. If they remain in a friendly bear hug (with Nikola’s face underwater until they stop moving), that’s a different story.

        “Our overall goal is to put everyone in an EV and accelerate adoption.” <– Is this statement from GM the truth or a lie?

        • 0 avatar
          Crosley

          But why do ANY business with something you believe is a complete fraud?

          Would you want your financial planning done with a firm that had partnered with Bernie Madoff or get your blood work back from a firm that had partnered with Theranos?

          • 0 avatar
            ToolGuy

            There is fraud and there is complete fraud – where this falls on the scale we don’t know yet. (But we do know that none of GM’s other competitors can pick up the pieces now, and that wasn’t true a month ago, prior to the GM deal.)

            “Our overall goal is to put everyone in an EV and accelerate adoption.” If this statement is now true, it’s the first time it’s ever been true (based on deeds not words), which unfortunately puts us in the ‘it’s different this time’ bracket which doesn’t have a good track record recently.

  • avatar
    Varezhka

    Well, the emperor may have no clothes, and Nikola may have zero technology of their own.
    Even if the company is ran by a bunch of con artists, they do have a pile of cash they fleeced from the investors, and GM will be getting them for free through this collaboration.

    If it goes well, Nikola will be selling GM designed and built pick-ups with full government subsidies. If not, well, GM doesn’t have much of a reputation to ruin anyways.

  • avatar
    SCE to AUX

    Mr Musk was right when he coined the term “fool cells”. Hydrogen fuel cells always look great in words, until someone actually does the physics and financial math.

    There are 46 hydrogen filling stations in the US, and 43 of them are in California. Just getting the infrastructure (costing millions apiece) in place is a Herculean task – way harder then building a Supercharger network. Even then, you’d have to demonstrate some cost savings for operators to even trial the technology, let alone adopt it.

    Anyone who thought Nikola has/had a chance is crazy. GM will kill off this scam in a few months.

    https://afdc.energy.gov/stations/#/analyze?fuel=HY&hy_nonretail=true&show_map=true&country=US

    • 0 avatar
      R Henry

      “43 of them are in California”

      One is very near my home, I drive past it as I go to work each day.

      I see all the local leased Mirias and Clarities lining up to fill their tanks. The process is slow. The times I don’t see cars using the filling apparatus, it is usually due to an “out of stock” sign placed on the machine. This is problematic since the next nearest Hydro filling station is about 40 miles away. Clearly, the hydro cars are merely toys at this point–with no fully reliable fuel source, drivers must have V8 Range Rovers back at home, waiting to be put into substitute service?

      It appears the Hydrogen supply is trucked in using a modular tank in a heavy steel framework–very much like the way tanks of liquid are shipped on container ships. I think delivery trucks are equipped with a system that lowers the full tank in place and then lifts the empty and hauls it away. Not a sustainable arrangement at all.

      • 0 avatar
        SCE to AUX

        Edmunds had a long-term Mirai, and refilling it was a nightmare. That’s saying something for Edmunds, a rag that is not very critical of its vehicles.

        The photos of a happy customer standing by a hydrogen refilling handle as casually as at a gas station are very misleading. Edmunds talked about the freezing issues that plagued the refill process due to the supercold nature of the fuel, mysterious fuel shortages as you mentioned, and ‘short shots’ of filling in which the tank would only fill halfway. The fuel cost also made driving the Mirai as expensive as a Hellcat.

  • avatar
    Crosley

    Mary Barra should lose her job over this, it was so obvious a mile away this guy was a huckster. Did she do ANY vetting on the technology, personnel, engineering, manufacturing?

    People are saying GM doesn’t have exposure financially, I would say ANY partnership with a fraudulent company is exposure.

  • avatar
    chris724

    Corporate types are arrogant dummies, and are easy to fool with smoke and mirrors.

  • avatar
    aja8888

    It would not surprise me if Mary Berra is shown the door at the next Board meeting.

  • avatar
    HotPotato

    If you cruise over to Elektrek, you can see the Tesla fanboiz crowing over this. They should be careful what they wish for in terms of enthusiastic enforcement.

    Milton may well have stretched the truth to the point of fraud. But Musk’s “full self driving computer” and promise of a fleet of autonomous robotaxis seem to me like they’re doing the same thing. People are paying $6000 for this computer on the insinuation that it does more than it currently can, and the promise that it will eventually do more than it likely ever will (i.e., be government-approved for fully autonomous use despite lacking lidar and maps, and generate passive income for the owner by letting them use their car as a robotaxi). I wish Tesla well, and maybe this is sincere wishful thinking on their part and not something worse, but…oof.

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