Nikola founder exits amid fraud allegations

Nikola Corporation founder and executive chairman Trevor Milton is stepping down from the electric truck startup following fraud allegations.

It comes after analyst firm and short seller Hindenburg Research released a damning report on the company saying it was built “on dozens of lies”.

Milton’s resignation is effective immediately and he is being replaced with former General Motors vice chairman Stephen Girsky.

Nikola released a statement on September 20 saying Milton approached the board of directors and proposed to voluntarily step aside.

“Nikola is truly in my blood and always will be, and the focus should be on the company and its world-changing mission, not me,” Milton says.

“So I made the difficult decision to approach the board and volunteer to step aside as executive chairman.

“Founding Nikola and growing it into a company that will change transportation for the better and help protect our world’s climate has been an incredible honor.”

“As we move forward, I am confident Steve is the right leader to guide our vision at the board level. In addition to being an early believer and supporter of Nikola, Steve has more than 30 years of experience working with OEM leaders, suppliers, dealers, labor leaders and national policy makers, and has served as a director of numerous public companies.

“We’ve built a deep bench of talent over the years, and I am confident that Nikola’s chief executive officer, Mark Russell, supported by chief financial officer, Kim Brady, and the rest of the leadership team will advance our goal of making Nikola the global leader in zero-emissions transportation. I want to thank all of Nikola’s employees, investors and partners who have shared in my vision and rallied behind Nikola during this time,” Milton says.

Girsky says he and the board “thank Trevor for his visionary leadership and significant contributions to Nikola since its founding”.

“Trevor saw the possibility of creating an end-to-end zero-emission transportation system when the industry was still in its nascent stages and took action to build the Nikola of today, with world-class partnerships, groundbreaking R&D, and a revolutionary business model. I know I speak for everyone at Nikola in our gratitude and in wishing him all the best,” Girsky says.

Shares in Nikola dropped around 20% and finished trading at US$27 following the news. Its shares have traded as high as US$79 since the company went public through a reverse merger in June but have been hit by the recent allegations.

Earlier this month, General Motors received a $2 billion stake

in Nikola to help accelerate production and development of the hydrogen fuel cell and battery electric pickup truck (ute) the Badger

 by the end of 2022.

Under the deal, Nikola will utilise GMs’ newly developed Ultium battery system and Hydrotec fuel cell technology  

while GM gains an 11% equity stake in the vehicle startup.

Hindenburg Research said in a statement that Milton’s resignation “is only the beginning of Nikola’s unravelling”.

“General Motors should carefully evaluate the potential long-term damage to its 112-year brand by continuing to tie itself to Nikola,” the research firm says.