In February, Nikola disclosed, following a review by an outside law firm, that both it and Milton had made several statements that were partially or completely inaccurate.
Specific charges
Among the false and misleading statements Milton made, according to the indictment:
- That the company had a “fully functioning” semi-truck prototype known as the “Nikola One,” despite the fact that Milton knew that the prototype was inoperable.
- That Nikola had engineered and built an electric- and hydrogen-powered pickup truck known as “the Badger” from the “ground up” using Nikola’s parts and technology, which he knew was not true.
- That Nikola was producing hydrogen and was doing so at a reduced cost, when “no hydrogen was being produced at all by Nikola, at any cost.”
- That Nikola had developed batteries and other important components in-house, when they were buying them from third parties.
- That reservations for Nikola’s semi-trucks were binding orders representing billions in revenue, when they were actually able to be canceled at any time “and were for a truck Nikola had no intent to produce in the near-term.”
Lawyers for Milton didn’t immediately respond to an email seeking comment. Prosecutors have scheduled an 11 a.m. press conference on the matter in N.Y.
Shares in Nikola plunged 8 percent in morning trading on Thursday.
Rise and fall
Nikola’s sudden rise and dramatic fall started a trend. EV startups including Lordstown Motors Corp. and Canoo Inc. have gone down similar tracks, merging with special purpose acquisition companies and then struggling to hold up to scrutiny after going public.
Nikola’s market capitalization has plunged from almost $29 billion in June last year to about $5 billion currently. Milton is the company’s largest shareholder with about a 20 percent stake in Nikola, according to data compiled by Bloomberg.
Nikola went public through a reverse merger with a blank-check company in June 2020, a deal made Milton into an overnight billionaire. At one point, the company’s shares ballooned to almost $80 apiece, giving it a market capitalization greater than Ford Motor Co. despite not generating any meaningful revenue.
Days after the startup’s shares debuted, Bloomberg News reported that Milton had exaggerated the capability of the company’s debut truck, the Nikola One.
Reuters, Bloomberg and Automotive News staff contributed to this report.
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