Trevor Milton, the founder and former CEO of Nikola Corporation, has been sentenced to four years in prison for making misleading promises to investors about the company’s electric trucks, which is a surprising turn of events. Milton received this sentence after being found guilty on three of the four securities and wire fraud crimes last year.
Milton’s deceptive actions included making false public statements about the progress of Nikola’s electric trucks, notably showcasing a fabricated video of the “One” hydrogen truck purportedly in operation when, in reality, it was merely coasting downhill. Such misleading claims created a false impression of the company’s development stage, leading to a surge in retail investor interest following Nikola’s SPAC merger in 2020. As a result, Milton’s net worth soared, turning him into a paper billionaire.
The scheme unraveled when Hindenburg Research, a short-seller, exposed numerous issues with Nikola, prompting Milton’s departure from the company and a $125 million fine from the SEC. Despite prosecutors seeking an 11-year sentence, Milton received a four-year prison term, along with the seizure of property, a $1 million fine, and three years of supervised release.
While Nikola has made strides in delivering battery-electric (BEV) trucks, distancing itself from Milton’s controversies, challenges persist. The company faced a $660 million loss for retail investors as its stock plummeted from an all-time high of around $80/share to its current trading price of less than $1/share.
Electrek, a source that had expressed skepticism about Nikola early on, emphasizes the need for caution when evaluating claims from new companies in the electric vehicle (EV) space. Despite the ongoing struggles, Nikola has managed to deliver BEV trucks, outpacing Tesla in the electric semi-truck market. However, the company’s journey remains tumultuous, marked by leadership changes and a significant truck recall, highlighting the inherent challenges faced by emerging players in the competitive EV landscape.