Trevor Milton: big dreamer wakes to a hard reality

Trevor Milton wanted to be the next Elon Musk, and planned to revolutionise transport with hydrogen-powered trucks. His dreams are unravelling amid allegations of fraud.

“An electric-vehicle entrepreneur with a bad Twitter addiction, dangerous propensity towards grandiose promises… and a knack for raising the eyebrows and blood pressures of short sellers and regulators has been forced from his pedestal by a burgeoning fraud scandal,” reports DealBreaker. No, not that one. It’s Nikola founder Trevor Milton – the man who once vowed “to out-Elon” Elon Musk – who has quit the hydrogen truck-maker after the US Securities and Exchange Commission and Justice Department launched investigations into whether his company misled investors. 

A bombshell explodes

Nikola, which like Musk’s creation is named after the inventor Nikola Tesla, is accused of making exaggerated claims about its core fuel cell and battery technology, says Cnet. The trigger was a “bombshell” report by the “forensic” short-seller, Hindenberg Research, which effectively accused the emperor of having no clothes. As well as flagging up concerns about Milton’s own colourful background, Hindenberg pointed out that a promotional video – set to a triumphant orchestral theme and purportedly showing a Nikola One lorry operating under its own power – was disingenuous at best: the vehicle, it seems, was simply “rolling” down a slope.

When the “pre-revenue” company floated in June, its value quickly eclipsed that of Ford, buoyed by partnerships with blue-chips including General Motors, Bosch and Anheuser-Busch. Milton, 39, became an instant billionaire via his 25% stake. Shares have since halved, notes The Sunday Times, and they lost another fifth this week. Suddenly, the company “is fighting suggestions that it is the Theranos of the auto industry – like the blood-testing company, an ‘intricate fraud’ spun by a charismatic founder with a knack for drawing in big-money backers”. Some investors and former and current employees paint a picture of a founder who “will say almost anything in pursuit of his dream of ‘revolutionising transport’”, says the Financial Times. 

“An incredible success”

Milton grew up in Utah, one of five children in a Mormon family, and “showed an early entrepreneurial spirit, buying sweets and reselling them at a mark-up to fellow pupils”, says The Sunday Times. “Never self-effacing”, Milton described his first business, which he set up after dropping out of university, as “an incredible success”, although it failed, notes Trucks.com. Indeed, Nikola is his sixth business. 

“Three were good successes, three were not so great, but a 500 batting average in baseball is the best player in the world,” he later observed of his record. Although untrained as an engineer, he says he dreamed of building electric trucks from childhood. The forerunner to Nikola, which he founded in 2015, was a company called dHybrid which aimed to convert diesel engines to run on natural gas, but which collapsed amid a welter of legal claims.

Last year, Milton observed that Nikola would be his “last business”. Those words may turn out to be more prophetic than he thought, says DealBreaker. But don’t rule out this “dime store Elon Musk’s” future ambitions for “serial innovating”. Milton recently bought a ranch in Utah, setting “a new price record” for farmland in the state, says The Wall Street Journal. The plan is to “revolutionise vertical farming”. 

Recommended

Marlboro Man stubs it out as Philip Morris CEO says “ban cigarettes”
Stockmarkets

Marlboro Man stubs it out as Philip Morris CEO says “ban cigarettes”

The boss of tobacco giant Philip Morris has called for a cigarette ban in the UK. But the industry isn’t about to disappear.
30 Jul 2021
Robinhood is going public – should you invest?
US stockmarkets

Robinhood is going public – should you invest?

Online stockbroking app Robinhood is going public on the US stock exchange. Saloni Sardana looks at whether it's worth a punt.
29 Jul 2021
José Neves: the Buddhist transforming luxury fashion
People

José Neves: the Buddhist transforming luxury fashion

José Neves cornered the market in building bespoke websites and apps for boutique fashion brands and retailers. That put him in a sweet spot when the …
25 Jul 2021
Philip Morris goes “beyond nicotine”
Stocks and shares

Philip Morris goes “beyond nicotine”

US tobacco giant Philip Morris International has agreed to pay £1bn for British inhaler specialist Vectura.
23 Jul 2021

Most Popular

Why the UK's 2.5% inflation is a big deal
Inflation

Why the UK's 2.5% inflation is a big deal

After years of inflation being a financial-assets problem, it is now an “ordinary things” problem too, says Merryn Somerset Webb. But central banks st…
16 Jul 2021
The MoneyWeek Podcast: Asia, financial repression and the nature of capitalism
Economy

The MoneyWeek Podcast: Asia, financial repression and the nature of capitalism

Russell Napier talks to Merryn about financial repression – or "stealing money from old people slowly" – plus how Asian capitalism is taking over in t…
16 Jul 2021
Three companies that are reaping the rewards of investment
Share tips

Three companies that are reaping the rewards of investment

Professional investor Edward Wielechowski of the Odyssean Investment Trust highlights three stocks that have have invested well – and are able to deal…
19 Jul 2021