Nikola Corporation (NASDAQ:NKLA) has been a subject of perennial interest in the financial circles ever since it debuted on the NASDAQ index with a bang back in June. Today, however, investors are getting their first look at a major skeptic’s viewpoint as Hindenburg has come forward with a damning report against Nikola.
While the report is quite detailed, we have highlighted some of the important allegations that Hindenburg has levied against Nikola:
- We have gathered extensive evidence—including recorded phone calls, text messages, private emails and behind-the-scenes photographs—detailing dozens of false statements by Nikola Founder Trevor Milton. We have never seen this level of deception at a public company, especially of this size.
- We examine how Nikola got its early start and show how Trevor misled partners into signing agreements by falsely claiming to have extensive proprietary technology.
- We reveal how, in the face of growing skepticism over the functionality of its truck, Nikola staged a video called “Nikola One in Motion” which showed the semi-truck cruising on a road at a high rate of speed. Our investigation of the site and text messages from a former employee reveal that the video was an elaborate ruse—Nikola had the truck towed to the top of a hill on a remote stretch of road and simply filmed it rolling down the hill.
- In October 2019, Nikola announced it would revolutionize the battery industry. This was to be done through a pending acquisition, but the deal fell through when Nikola realized (a) the technology was vaporware and (b) the President of the battery company had been indicted months earlier over allegations that he conned NASA by using his expense account to procure numerous prostitutes.
- Nikola has never walked back claims relating to its battery technology. Instead, Trevor continued to publicly hype the technology even after becoming aware of the above issues. The revolutionary battery technology never existed – now, Nikola plans to use GM’s battery technology instead.
- In addition to now using GM’s battery technology, Nikola seeks to use the automaker’s production and fuel cell capabilities. Nikola seems to be bringing nothing to the partnership but concept designs, their brand name and up to $700 million they will be paying GM for costs related to production.
- Inexpensive hydrogen is fundamental to the success of Nikola’s business model. Trevor has claimed in a presentation to hundreds of people and in multiple interviews to have succeeded at cutting the cost of hydrogen by ~81% compared to peers and to already be producing hydrogen. Nikola has not produced hydrogen at this price or at any price as he later admitted when pressed by media.
- Claims of owning energy producing assets is not new for Nikola. Trevor claimed that Nikola’s headquarters has 3.5 megawatts of solar panels on its roof producing energy. Aerial photos of the roof and later media reports show that the supposed panels don’t exist.
- At one point Nikola claimed to own its own natural gas wells. There is no evidence in company filings to support this. The claims were eventually quietly removed from Nikola’s website.
- The company’s Nikola One “reveal” was a total farce. We corroborate Bloomberg’s earlier work debunking Trevor’s claims regarding its semi-truck that “this thing fully functions and works…this is a real truck” and provide new evidence.
- We present behind-the-scenes photos showing that Nikola had an electricity cable snaked up from underneath the stage into the truck in order to falsely claim the Nikola One’s electrical systems fully functioned.
- We learned through emails and interviews with former partners that Trevor had an artist stencil “H2” and “Zero Emission Hydrogen Electric” on the side of the Nikola One despite it having no hydrogen capabilities whatsoever; it was built with natural gas components.
- Nikola’s much-touted multi-billion-dollar order book is filled with fluff. U.S. Xpress reportedly accounts for a third of its reservations, representing ~$3.5 billion in orders. U.S. Xpress had only $1.3 million in cash on hand last quarter.
- Nikola’s key partners and backers have been cashing out aggressively. Worthington, Bosch and ValueAct have all sold shares. Worthington sold $237 million shares over a 2-day span in July and another $250 million in August. We think they know exactly what type of company Nikola is, and we expect that as Nikola’s GM “partnership” boosts the stock price, key holders will continue to exit.
In order to better understand some of these allegations, additional context is merited. As stated earlier, Nikola has entered into a strategic partnership with General Motors. As per the terms of this collaboration, General Motors (NYSE:GM) will receive an 11 percent stake – based on 47.7 million shares – in Nikola Corporation for providing services as well as access to key parts and components. Specifically, General Motors will manufacture the Nikola Badger electric pickup truck – the BEV as well as the FCEV variants. It will also provide batteries and fuel cells for Nikola’s Class 8 trucks. To this end, Nikola will utilize GM’s under-development Ultium battery system and Hydrotec fuel cell technology. For its part, Nikola will be responsible for the sale and marketing of the Badger truck while also retaining control of the Badger brand. As an additional incentive, GM has acquired the rights to at least 80 percent of the tax credits that will be generated through retailing the Badger truck. Additionally, GM will also get the right of first refusal to the residual 20 percent of these tax credits.
As is evident from the details above, Nikola is indeed relying solely on GM’s technology for the production of the Badger electric truck without utilizing any of its supposedly extensive proprietary technology.
Another crucial part of this damning report deals with the company's botched reveal of its Nikola One Class 8 electric truck. According to the pertinent reporting by Bloomberg, the company had unveiled an undrivable prototype while claiming to the contrary:
“Milton then made several comments to the crowd at the December 2016 event suggesting the Nikola One was driveable. The statements alarmed people familiar with the truck’s capability, who told Bloomberg News recently that it was inoperable and missing key components to power itself. On Wednesday, Milton said key parts were taken out of the vehicle for safety reasons and that it never drove under its own power.”
While it is up to the company to clarify these serious allegations, its shares are indeed taking a beating. As an illustration, the stock is currently down over 10 percent in early morning trading.
Update: Nikola Has Now Released a Press Statement
While most investors were waiting for Nikola to issue a line-by-line rebuttal of Hindenburg's allegations, the company has instead chosen to release a brief press statement on Friday, vowing to initiate legal action against the research house. This, to say the least, is not a satisfactory response. We await further clarification.
Update 2
Trevor Milton will not provide any further details until the SEC completes its investigation.
https://twitter.com/nikolatrevor/status/1304404741036937223
https://twitter.com/nikolatrevor/status/1304404742727237632
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
Follow Wccftech on Google to get more of our news coverage in your feeds.
