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Federal inquiries, allegations of sexual assault, a resignation, and billions on the line: Here’s everything you need to know about Nikola and its founder’s controversial last 5 weeks


trevor milton mary barra

Summary List Placement

In early September, automotive giant General Motors announced a $2 billion deal with electric-vehicle startup Nikola, with plans to produce the Nikola Badger, an electric pickup truck. But just two days after the deal was announced, a short seller released an explosive report claiming that Nikola faked its technological achievements, which spurred federal inquiries, a resignation, and speculation about the future of the deal.

Here’s everything you need to know about the last month’s controversy, and what it means for the future of GM, Nikola, and the electric truck they are looking to build.

The partnership begins: GM announces it’s taking an 11% stake in Nikola on Sept. 8

On September 8, GM announced that it would begin a strategic partnership with Nikola in a $2 billion, all-stock deal. The terms of the agreement would see GM manufacture the startup’s first pickup, the Badger, producing both the electric-battery and fuel-cell versions.

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For Nikola, a contract with America’s largest Original Equipment Manufacturer by sales boosted credibility, Wedbush analysts said, and its share prices. Following the announcement, Nikola’s stock price jumped 53%, Markets Insider previously reported. 

For GM, the deal was supposed to pay for itself. Nikola would pay GM $700 million to engineer and manufacture the Badger, and in turn, GM could show off its Ultium battery in the new truck and collect 80% of the emissions credits for the vehicle. As part of the deal, GM would also be the exclusive provider of fuel cells for Nikola’s semi-trucks, excluding Europe.

2 days later, Hindenburg Research released the explosive report, “Nikola: How to Parlay An Ocean of Lies Into a Partnership With the Largest Auto OEM in America”

Hindenburg research announced that it gathered “extensive evidence” that it said indicated that “Nikola is an intricate fraud built on dozens of over the course of its Founder and Executive Chairman Trevor Milton’s career” on Sept. 10. The firm has a short position on Nikola, which means that it stands to profit if Nikola’s share price goes down.

The report said that Nikola made false or misleading claims about having proprietary battery technology, natural gas wells, solar panels, and hydrogen production capabilities. The report also said that while Milton claimed Nikola designed key components of its vehicles in house, the technology actually was licensed or bought from third parties.

In addition, Hindenburg Research said the Nikola’s presentations of its semi-truck, the Nikola One, were “a total farce.” During one event, the electric vehicle company claimed that the truck’s electrical systems worked, but Hindenburg’s report said that there was an electrical cable under the stage secretly powering the truck.

Nikola also promoted a video of the semi-truck cruising down a road, but Hindenburg’s report said that the truck was towed to the top of a hill, and then filmed as it rolled down to make it …read more

Source:: Business Insider

      

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