Tesla’s meteoric rise has spawned countless imitators and a number of eco-friendly companies are going public to capitalize on the trend.
One of them is Nikola which went public earlier this year and is now worth billions. However, a report by Hindenburg Research claims Nikola is an “intricate fraud” which parlayed an “ocean of lies into a partnership with the largest auto OEM in America.”
Also Read: Nikola And GM Shake Hands On Strategic Partnership
The lengthy report, which you can read here, is chock-full of accusations and including that Nikola founder Trevor Milton has made “dozens of false statements.” In particular, they said Milton claimed the Nikola One was a fully functioning truck when it was unveiled but it wasn’t. They also said the company had someone stencil “H2” and “Zero Emission Hydrogen Electric” on the sides of the semi, even though it was setup to run on CNG.
Hindenburg Research goes on to claim the One “could not power itself, let alone drive, so an electric cable was snaked up through the stage” to power the semi during its unveiling. The company then reportedly stopped development as the event gave Nikola the “legitimacy it needed to raise more investment and court larger partners that would be able to build them an actual working model from start to finish.”
Hindenburg Research also claims Nikola faked videos showing the One moving under its own power. They say this wasn’t the case as Nikola took a non-running truck and simply let it roll down a hill to get video of the One in motion. They claimed to have replicated this with a vehicle in neutral, and were able to roll approximately 2.1 miles (3.4 km) and hit a top speed of 56 mph (90 km/h).
The report goes on to note employees with questionable credentials, claims of passing off other company’s products as their own, and an order book that is “more fluff than substance.” In regards to the latter, they noted U.S. Xpress has reserved approximately $3.5 (£2.7 / €2.9) billion worth of semis but the company only had $1.3 (£1.0 / €1.1) million in cash according to filings with the U.S. Securities and Exchange Commission.
While that’s just a brief overview of the claims, the report says “two [of the] most glaring red flags that something is amiss at a company are (a) an obsession with secrecy and (b) the constant threat of legal action or retaliation against anyone who speaks out.”
The latter is happening as Nikola said “We have retained leading law firm Kirkland & Ellis LLP to evaluate potential legal recourse, including with respect to the activist short seller and any others acting in concert.”
The company went on to claim Hindenburg Research’s “motivation is to manipulate the market and profit from a manufactured decline in our stock price.” As part of this effort, Nikola says they came up with a “so-called ‘report’ replete with misleading information and salacious accusations directed at our founder and executive chairman.”
Nikola went on to say the report was a “hit job for short sale profit driven by greed” and they’ll “bring the actions of the activist short-seller, together with evidence and documentation, to the attention of the U.S. Securities and Exchange Commission.” The company added they refute the allegations and have nothing to hide.
H/T to The Detroit Bureau
