Less than two weeks after signing a $2 billion deal with General Motors Co., the founder of electric truck startup Nikola Corp. stepped down amid a claim that he had repeatedly lied about the company’s technology.

The resignation of Trevor Milton as executive chairman, announced late Sunday, came after investment fund Hindenburg Research published a report accusing him of making numerous false assertions about Nikola’s technology, including once producing a video in which a truck was rolled down an incline to make it look as if the company had developed a working prototype.

Hindenburg, a short-selling firm that said it was aiming to profit by betting Nikola’s share price would go down, called Nikola “an intricate fraud.” Its report appeared only days after the company and GM agreed to cooperate on production of battery-powered pickup trucks and hydrogen-powered heavy trucks.

Nikola, based in Phoenix, called the accusations by Hindenburg “false and defamatory” and said it would complain to the Securities and Exchange Commission. Nikola shares, which had jumped after the deal with GM, fell sharply after the Hindenburg report. On Monday, the shares were down 17% in afternoon trading, to barely half their value after the GM deal was announced.

Bloomberg News reported last week that the SEC was looking into the Hindenburg allegations against Nikola, and The Wall Street Journal reported that the Justice Department was doing so. Neither agency has confirmed that an investigation is underway.

Milton said in a statement that “the focus should be on the company and its world-changing mission, not me. So I made the difficult decision to approach the board and volunteer to step aside.”


Stephen Girsky, a former vice chairman of GM and a member of Nikola’s board, will take over as chairman.

While denying Hindenburg’s accusations, Nikola acknowledged that a 2017 prototype truck that appeared in a promotional video was not operating under its own power.

“Nikola never stated its truck was driving under its own propulsion in the video,” the company said in a statement.

Nikola said it had since built fully functional models.

The deal with GM held the prospect of providing crucial help in assembling a pickup truck that Nikola hopes to introduce by the end of 2022. In exchange, GM took an 11% stake in the company valued at the time at $2 billion.

GM on Monday affirmed its resolve to go forward with the deal.

“We will work with Nikola to close the transaction,” the company said in a statement. “Our overall goal is to put everyone in an EV and accelerate adoption.”


Nikola listed its shares in June and at the end of trading Friday was worth nearly $13 billion, although it essentially has no revenue and has not yet sold or produced a single truck.

Analysts have been predicting that traditional carmakers like GM would form partnerships with fast-moving electric car startups to catch up with Tesla, which has a considerable lead in battery technology. GM’s deal with Nikola illustrates the hazards of that approach.

Whatever the state of its technology, few companies have experienced Nikola’s meteoric rise. Milton, 39, is a college dropout who started a security alarm business and then a company that sought to convert diesel engines to run on natural gas before it ran into legal trouble and was sold. In 2014, he founded Nikola with a plan to produce zero-emission semitrucks that run on hydrogen fuel cells and batteries.

His ambitions mirror those of Tesla, another company that aimed to shake up the automotive industry. Milton even drew on the same source for his company’s name — inventor Nikola Tesla, who achieved breakthroughs in electric motors in the late 1800s.

Milton unveiled a semitruck, called the Nikola One, in 2016, and said it was operational.

“It’s not a pusher,” Milton said at the event, using an industry term for a mock-up vehicle that cannot be driven and must be pushed.


In its report, Hindenburg Research contended that the promotional video showing the moving 2017 prototype and Milton’s statements were part of “an ocean of lies.” It also accused Milton of claiming Nikola had proprietary technology, when it sourced components from suppliers.

Hindenburg’s founder, Nathan Anderson, 37, declined to say how much money his company had put into shorting Nikola shares or how much it had made since the report was released.


Hindenburg has a track record of uncovering investment funds and companies whose numbers don’t add up. In some cases, the discoveries have led to resignations by senior executives or investigations by regulators.

“If someone is lying about a product working when it doesn’t, or a product being complete when it isn’t, that seems like fraud,” Anderson said. “I think investors deserve honest answers on what they’re actually buying into.”

One question about Hindenburg’s accusations is that they occurred while Nikola was still privately held and before it became bound by SEC disclosure rules for publicly traded companies.


In a message posed on Twitter on Sept. 11, Milton said Hindenburg’s allegations were “lies” and noted his company had retained law firm Kirkland & Ellis to work with the SEC on Nikola’s complaints about the Hindenburg report.


“To be clear, this was not a research report and it is not accurate,” Nikola said in a statement. “This was a hit job for short sale driven by greed.”

In a lengthy written rebuttal to Hindenburg’s claims, Nikola acknowledged the truck shown in the 2017 promotional video was not moving on its own, but it said that a semitruck, called the Nikola Tre, was being produced in a joint venture with Iveco, the Italian truck-maker, and said it would be available by the end of next year. Republic Services, the trash hauler, has placed an order for 2,500 electric garbage trucks, Nikola added.

Milton also posted pictures of what he said are five trucks being assembled in Ulm, Germany.

“Do these look fake?” he wrote.


The new chairman, Girsky, has played a critical role in Nikola’s rise to prominence. After leaving the GM board in 2016, he started an investment company, VectoIQ, to provide strategic and financial help to automotive technology startups. He also created a special purpose acquisition company, or SPAC, that owned nothing but cash and a stock listing. When VectoIQ’s SPAC merged with Nikola in June, Nikola became a publicly traded company, and Girsky joined its board.

Girsky was also a catalyst for GM’s partnership with Nikola. In the past he has said he called on former GM engineers to evaluate Nikola’s technology and its business prospects while considering the SPAC merger. When he realized GM had developed fuel-cell and battery technology Nikola might be able to use, he put Milton and GM’s chief executive, Mary T. Barra, in contact with each other.

“The initial introductions were made by Steve Girsky,” Barra said in a conference call to announce the partnership.



The day-to-day running of Nikola is in the hands of Mark Russell, the chief executive, whose ties to Milton go back several years. Before joining Nikola as president last year, he was chief executive of Worthington Industries, a diverse maker of steel products like tanks for propane, hydrogen, helium and natural gas. Worthington acquired Milton’s diesel conversion company, dHybrid Systems, in 2014 and also invested in Nikola.


Before Milton’s resignation, Sam Abuelsamid, an analyst at Navigant Research who follows developments in electric vehicles, said Nikola’s idea of powering and building a network of hydrogen fueling stations had merit.

A purely battery-powered semi, something Tesla is betting on, would likely have a shorter range than trucks with hydrogen fuel cells and a massive battery that could take hours to recharge — down time that could prove too costly to trucking companies.

“Nikola’s vision actually makes a lot of sense,” he said. “Whether they can execute on that is entirely another story, however.”