Prosecutors said Milton misled investors by claiming Nikola built its own vehicle from the ‘ground up.’
Share this story
Trevor Milton, the founder and former CEO of electric truck company Nikola, was sentenced to four years in prison after a jury found him guilty of misleading investors about the company’s technology. Milton was also ordered to pay a $1 million fine.
Federal prosecutor said Milton had lied about Nikola’s capabilities, including an assertion that it had built its own electric truck, the Nikola One, from the “ground up.” They also accused him of staging a video that purportedly showed its Nikola One semi driving under its own power when it was actually rolling down a hill.
During the sentencing hearing, Milton made several bizarre statements. He claimed that his resignation from Nikola was not a result of the fraud allegations but because his wife had an illness. He also said he was a quarter Cherokee and was emotional recounting “ethnic cleansing” against the tribe.
Founded in 2015, Nikola staked out a unique position in the buzzy EV space by claiming it would make zero-emission big rigs using hydrogen fuel cell technology. The company scored a huge win in 2020 when General Motors announced plans to acquire an 11 percent equity stake. The automaker also said it would help Nikola engineer and manufacture its battery-electric and hydrogen fuel cell vehicles, including the Badger pickup truck.
But less than a week later, short-selling firm Hindenburg Research published a bombshell report accusing Nikola of fraud, including the video showing the truck rolling down a hill. The report set off a chain reaction that resulted in Milton’s stepping down as board chair and CEO and his eventual arrest.
In addition to staging the video, Milton was accused of falsely claiming to produce his own hydrogen fuels at below-market rates and obtaining “billions and billions and billions and billions” of dollars’ worth of committed truck orders.
Fallout from the report was swift. GM backed out of the equity deal. The company has continued operation but scaled down its ambitions significantly. In 2021, Nikola halted work on its planned electric ATV and motorboat, a decision that cost the company $14 million, according to regulatory filings. The company’s stock is now trading for less than $1 a share.
