Nikola founder fined $1 million and sentenced to four years in prison for fraud relating to its vaporware EV truck

Nikola founder and former CEO, Trevor Milton has been sentenced to four years in jail in a fraud case involving the electric truck manufacturer. Milton had claimed that truck maker Nikola had built its vehicle from the ground up. The jury found him guilty of misleading investors about the company’s technology. The former CEO was also ordered to pay a fine of $1 million.

The fraud case was instituted in the US and the Federal prosecutor said Milton provided false information about Nikola’s capabilities. The false information included a claim that the company built the Nikola One electric truck from the ground up. The prosecutor also accused Milton of staging a video purportedly showing the Nikola One semi-driving under its power when it was rolling down a hill.

Nikola was founded in 2015 and claimed it would make zero-emission big rigs based on hydrogen fuel cell technology. In 2020, General Motors announced plans to acquire an 11% equity stake in Nikola. GM also said that it will assist Nikola in manufacturing its battery-electric and hydrogen fuel cell vehicles. However, the upward progression of Nikola was seemingly halted a week later after a bombshell report came from Hindenburg Research. The short-selling firm had accused Milton of fraud including the video of the Nikola One truck rolling down a hill. Milton was also accused of falsely claiming to produce hydrogen fuels at below-market rates, as well as obtaining several billions of dollars in truck orders.

A fallout of the damning report on Nikola saw General Motors swiftly backing out from its planned equity purchase and Milton stepping down as the board chair and CEO. The report also triggered a federal investigation that led to the arrest of Milton. The crisis led to the scaling down of the company’s operations and in 2021, it halted work on its electric ATV and motorboat project. About $14 million is estimated to have been lost by Nikola as a result of the discontinuation of the electric ATV and motorboat development.

There has been no official response by Nikola or Trevor Milton on the fraud case ruling. This may however not be the end of the case.

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