Electric vehicle
startups have had a lot of ups and downs to deal with in the past few years, but few stories reached “crime drama” levels like the turmoil surrounding Nikola. The electric truck maker has seen its value hit epic heights and threatening lows. Now, its founder and former CEO Trevor Milton is having his day in court to face charges of securities fraud.
Jerry
, your car insurance super app
, found all the details about the case and the automaker at the center of it to help keep you informed.Nikola’s former CEO is in a lot of trouble
Things were looking good for Nikola in June 2020. The new company entered the stock market through a special purpose acquisition corporation (SPAC) and, for a moment, was valued to be worth more than Ford. But within a few months, the startup’s stock had crashed and burned.
The drop in value came after a report on the company claimed that its CEO, Trevor Milton, had exaggerated his claims about Nikola’s progress. Within two weeks Milton had resigned, and in the summer of 2021, federal authorities accused him of defrauding investors.
The New York Times
says Milton made false claims about all kinds of things, from the functionality of prototypes to the sources of technology used for the pickup truck he claimed Nikola was developing “from the ground up.” The trial began on September 12 in Manhattan and is expected to take four or five weeks. If found guilty, Milton could face enormous fines and significant jail time.
Nikola attempts to rise from the ashes
Suffice it to say, the case against Trevor Milton has not been good for Nikola’s business. At its peak, the company’s stocks were worth $66 a piece. The Times says recent trades had them valued at $5.40. On top of that, Nikola agreed to pay a civil penalty of $125 million.
But it doesn’t look like the company is giving up. This past spring, while stock prices of other EV brands like Rivian and Tesla slipped, Nikola announced that it had secured the components it needed to complete the trucks planned for production in 2022.
As of September, Nikola has delivered about 50 Tre semi trucks to dealers. The Times reports that the startup had $18 million in sales and a net loss of $173 million by the end of the second quarter this year. So there’s still a long road ahead.
Will Nikola’s pickup truck ever make it to buyers?
Electric trucks are all the rage right now. The Ford F-150 Lightning and Rivian R1T are still the only true electric pickups available, but Chevy, GMC, and Dodge all plan to join the segment soon. But will we ever see the Nikola Badger roaming the streets and backcountry of America?
The answer is no: after the damning report and securities fraud fiasco, GM pulled its support from the startup, effectively canceling Nikola’s pickup truck dreams. Instead, the company plans to focus on its commercial truck, the Tre.
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MORE: Why No One Wants to Be a Truck Driver Right Now
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