Nikola’s Trevor Milton continues to deny many parts of the recent report from Hindenburg Research accusing the company of fraud.
The battle between Nikola Corp. and Hindenburg Research is heating up as the U.S. Securities and Exchange Commission is now investigating the EV startup based on some of the allegations laid out in a recent report by the short-selling research firm.
Nikola, which recently finalized a $2 billion deal with General Motors, angrily denied the charges in the report, fraud being the most damning, and suggested it may file suit against the research firm about the allegations. Since then, the company has started working with SEC investigators. The SEC has not commented on the probe.
“On September 11, Nikola’s legal counsel proactively contacted and briefed the U.S. Securities and Exchange Commission (SEC) regarding Nikola’s concerns pertaining to the Hindenburg report. Nikola welcomes the SEC’s involvement in this matter,” the company said in a statement.
(Nikola CEO Angrily refutes claims of short-selling research firm.)
In the wake of the report, the Phoenix-based company revealed it engaged law firm Kirkland and Ellis to evaluate its options. The research report, which was released Sept. 10, is titled “How to Parlay an Ocean of Lies into a Partnership with the Largest Auto OEM in America.”
Hindenburg Research’s report claims that Nikola committed fraud to get a deal with GM.
While clearly a reference to the new deal with GM, the firm claimed on its website, “Today, we reveal why we believe Nikola is an intricate fraud built on dozens of lies over the course of its Founder and Executive Chairman Trevor Milton’s career.”
The ongoing news temporarily put GM Chairman and CEO Mary Barra on the hot seat during a question-and-answer session during her online appearance at the RBC Capital Markets Global Industrials Virtual Conference. Barra touted the new deal with the EV upstarts, saying that it was a great strategic fit for the automaker and its own electric vehicle development program.
“It allows us to have more people using the technology, which gives us the advantage of scale, which will help us drive costs down,” Barra said.
(GM forges $2B deal with Nikola to build trucks, develop new electric and fuel-cell technology.)
“And then from a fuel cell perspective, using the Hydrotec fuel cell technology, and entering a new segment for us, a growth segment, again validating our fuel cell technology, I think it starts to unlock an all-new growth area for us as it relates to fuel cells.”
GM Chairman and CEO Mary Barra said earlier that the company had done due diligence on Nikola.
However, when pressed about the allegations in the Hindenburg report, including that Nikola engaged in “lies and deception” in showcasing its electric vehicle technology, including staging a video that showed one of its trucks cruising down a hill, Barra said the company had conducted its due diligence before closing the deal. She then referred further questions about Nikola to representatives of the Phoenix-based company.
Nikola was on the offensive earlier Monday, noting there were “dozens” of inaccurate statements in Hindenburg’s report, and it outlined several examples. It also made the same claims last week when the report was initially released.
Aside from denying many charges, the company is also explaining some of the them in the report, such as towing one of its truck prototypes to the top of a hill and allowing it to roll down, appearing to be operating under its own power.
(Nikola Motors begins taking reservations for Badger hydrogen/electric pickup.)
“Nikola never stated its truck was driving under its own propulsion in the video, although the truck was designed to do just that (as described in previous point),” the company states. “The truck was showcased and filmed by a third party for a commercial. Nikola described this third-party video on the Company’s social media as ‘In Motion.’ It was never described as ‘under its own propulsion’ or ‘powertrain driven.’”