In a dramatic turn of events for the electric and hydrogen truck industry, Trevor Milton, the founder of Nikola Corporation, has been sentenced to four years in prison for misleading investors about the company’s products and technology.
The sentencing follows a three-year trial initiated in September 2020, exposing fraudulent statements surrounding Nikola’s progress in developing its electric and hydrogen trucks.
Nikola Corporation, once touted as a frontrunner in the electric and hydrogen truck revolution, faced a significant setback as its founder, Trevor Milton, was found guilty of securities fraud and wire fraud. The trial, spanning three years, brought to light Milton’s alleged exaggeration of the capabilities of the Nikola One prototype hydrogen truck, portraying it as a fully functional vehicle despite critical missing parts.
The heart of the controversy lies in Milton’s purportedly fraudulent scheme to deceive investors about Nikola’s products, technical advancements, and commercial prospects. The infamous video featuring the Nikola One semi-truck prototype, claiming it was fully functional when it could only roll down a hill, became a focal point of the prosecution’s case. This staged video, designed to boost investor confidence, ultimately contributed to Milton’s conviction on securities and wire fraud charges.
Ripple effects on Nikola, investors, and the EV industry
The aftermath of Milton’s conviction reverberates through Nikola’s history, with General Motors’ short-lived 11% stake acquisition in the company less than a month before the allegations surfaced. The ill-fated Nikola Badger, a proposed electric or hydrogen-powered pickup, faced cancellation in 2020 following GM’s withdrawal of financial support. Nikola, once a promising player, delivered less than 300 electric trucks since its founding in 2014, with no hydrogen-powered examples produced since 2016.
As Trevor Milton faces a four-year prison term and a $1 million fine, the case stands as a cautionary tale for both investors and aspiring companies in the electric and hydrogen truck space. Milton is currently free on bail while he appeals the conviction.