In 2018, the CEO of Nikola, an upstart company seeking to make viable electric- and hydrogen-powered lorries, released a promotional video of its prototype Nikola One truck, which appeared to drive under its own power, says Tech Crunch. In reality, it was rolling down a hill. That video sparked investigations by Hindenburg Research, which called the company a fraud.
In December 2023, that drama came to a close when Trevor Milton, the disgraced founder and former CEO of the company, was found guilty of lying to investors about the development of Nikola’s electric trucks in order to inflate the stock price and was sentenced to four years in prison.
Milton, 41, had ambitions to be the next Elon Musk. His company, like Musk’s, was named after inventor Nikola Tesla – and like Musk was known for making grandiose promises on social media. He became an overnight billionaire, says CNBC, when he took Nikola public in 2020 through a special purpose acquisition company (SPAC), formed to raise cash for a takeover – a process over which regulators have tightened up the rules.
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But there’s a very definite if thin line between “faking it till you make it” – a common strategy in tech – and fraud. The court ruled that Milton had crossed that line, and the judge and jury were unmoved by Milton’s tearful pleas for mercy.
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Milton, who grew up in Utah in a Mormon family, claimed his statements resulted from “deeply held optimism”, and that his Mormon faith meant he was incapable of telling deliberate falsehoods. The judge told him that “the law does not grant a pass for good intentions”.
The company’s intentions of upending its industry remain, and it has sought reimbursement from Milton for costs and damages. But the road to success from here is steeper than the hill its trucks were rolled down. Investor analytics company Macroaxis says the firm is more than likely to go bankrupt, and in August the firm had to recall most of its battery-electric trucks when it was revealed they are at risk of bursting into flames, says Ars Technica. The shares now trade for less than $1, down from a peak of more than $60 in June 2020. But present CEO Steve Girsky remains upbeat. We’re “in it for the long haul”, he said.
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