Nikola Motor Company

Main Article: Electric Vehicles (Global Market)

Nikola is engaged in the creation of trucks on hydrogen fuel cells with zero emissions into the atmosphere (carbon dioxide (carbon dioxide - CO2)). One of the company's main competitors in the United States is Tesla.

History

2023

Founder of electric car maker Nikola gets 4 years in prison for defrauding investors

On December 18, 2023, US District Judge Edgar Ramos announced the verdict against Trevor Milton, founder and former chairman of the board of directors of electric car maker Nikola, in Manhattan federal court. He was sentenced to four years in prison for defrauding investors. Read more here.

23% staff cut due to lack of money

In mid-June 2023, the American company for the production of electric vehicles and electric trucks Nikola announced the reduction of 270 employees or about 23% of the staff as part of cost optimization.

The automaker is laying off 150 workers who supported the company's European programs. Another 120 employees working at the company's Phoenix and Coolidge, Arizona facilities will also lose their jobs. About 900 employees will remain. Nikola fell 15% but rose about 1.7% in post-market trading after the announcement.

Nikola fires 150 workers who supported the company's European programs

According to Nikola, the company is expected to reduce cash costs related to personnel by more than $50 million per year. As a result of the cuts, the company's annual cash costs are expected to drop to less than $400 million by 2024. When the number of employees is reduced, Nikola management undertakes to follow all legal procedures for this process.

In this [second] quarter, Nikola embarked on a more focused business plan, focusing on North America, zero emission truck manufacturing and our HYLA hydrogen business! Our battery-electric truck is already on the market and performing well for our customers, and the hydrogen electric fuel cell truck will be in production in a few weeks. We actively manage costs and reduce costs. We are streamlining operations, including our organizational structure, to effectively accomplish our tasks, Nikola CEO Michael Loshscheller said in a statement.

According to Techcrunch, Nikola management has been trying to reverse the company since its founder and CEO Trevor Milton was charged with federal securities fraud. While Nikola has made some progress, including appointing a new CEO and preparing for commercial production, it has also faced numerous obstacles in manufacturing.

In May 2023, Nikola received a delisting notice from the public exchange as its share price was below $1 for the past 30 days. Nikola has until November 20, 2023 to comply with the Nasdaq minimum price rule, according to which the share price must be above $1 for 10 working days in a row.^[1]

2021: $125 million payout for defrauding investors

On December 21, 2021, it became known that the manufacturer of electric trucks Nikola will pay the Securities and Exchange Commission (SEC) $125 million to settle charges for misleading its investors about its products, technical capabilities and business prospects.

SEC officials said they hope the fine will serve as a warning to all companies seeking to enter the public markets through the SPAC deal. In particular, officials said that the statements of companies hoping to enter the public capital markets should be true.

Electric truck manufacturer Nikola will pay $125 million to deceive investors

The SEC said the company and its founder and former CEO Trevor Milton misled investors about the capabilities of their trucks, including citing a video of a Nikola truck rolling down a hill, giving the appearance it was "fully operational."

A misleading advertising campaign has helped Nikola lift its stock price, though the company has yet to generate a single dollar in revenue, according to the SEC.

Before Nikola produced a single commercial product or generated any revenue from the sale of trucks or hydrogen fuel, Milton launched a public relations campaign aimed at inflating and maintaining the company's stock price, the SEC said in a letter. - Milton misled investors about Nikola's technological advancements, the company's manufacturing capacity, order list and financial outlook.

The $125 million settlement Nikola told investors did not suggest the electric car maker would admit or deny wrongdoing. Milton, who resigned from the company in September 2020 and was separately charged with federal securities fraud in July 2021, has pleaded not guilty.^[2]

2020

GM refuses to invest $2 billion in Nikola after investor fraud scandal

On November 30, 2020, General Motors (GM) announced that it would not invest in Nikola Motor, which led to a collapse in the quotes of the novice electric car developer.

GM planned to buy 11% of Nikola for $2 billion, but this agreement has now been terminated, and a new memorandum of understanding has been concluded instead. This agreement assumes that GM will only supply fuel cells for Nikola commercial trucks. The memorandum itself is non-binding, notes. Bloomberg

And Nikola also said it no longer plans to release a Badger pickup truck. So it seems that the upcoming futuristic pickup Cybertruck Tesla will directly compete with itself, because initially it was Badger that was supposed to become its main competitor. Nikola will refund all prepaid orders for Nikola Badger, according to the company's website. The parties will also discuss the supply of batteries developed by GM. Ultium

GM refused to invest $2 billion in Nikola

Nikola shares by the close of the Nasdaq exchange on November 30, 2020 fell in price by almost 27%, and in electronic trading the quotation rate sank by another 3%.

As noted by Ars Technica, the deal with GM was concluded under Nikola founder Trevor Milton. Following his departure from the company in September 2020, CEO Mark Russell downplayed the Badger project. In October, he called Badger an "interesting and exciting project" that is not part of Nikola's "core business plan."

GM and Nikola did not specify the reason for the breakdown of the deal, and it is possible that it was the startup that became the initiator. Earlier it was reported that the contract between the companies was drawn up in favor of GM: Nikola pledged to invest hundreds of millions of dollars in order to gain access to GM's technology and know-how. And the American auto giant, in turn, was not going to invest in Nikola, according to the publication of Ars Technica.^[3]

Trevor Milton's departure from the company

On September 20, 2020, the American manufacturer of electric trucks Nikola Motors announced the departure from the company of its founder and chairman of the board of directors Trevor Milton. His place was taken by the former vice president of the General Motors concern (he previously invested in Nikola) Stephen Girsky. Read more here.

Nikola admits it filmed a car in the ad that can't drive on its own

In September 2020, Nikola responded to accusations of lying by one of its shareholders.

The company confirmed that the Nikola One truck, filmed in promo video in 2016, could not drive on its own. The car had a working gearbox, batteries, power steering and other components, Nikola said. However, the company did not mention a functioning hydrogen fuel cell or wheel-driving engines - key components for the technology.

"Nikola never claimed that in the video the truck was driving on its own. In social networks, the description for the video stated: "In motion," but not "Rides on its own" or "Rides with the help of an engine," "the automaker emphasized.

Nikola noted that the company has a functioning prototype of the Nikola Two truck, the capabilities of which the company demonstrated in 2019.

Fraud allegations and stock price collapse

An extremely negative study by Hindenburg Research collapsed the quotes of the electric car manufacturer Nikola on September 10, 2020. The company was accused of fraud and misleading partners and investors. The stock collapsed 12%.

Quotes fell after the release of a devastating report by the financial firm Hindenburg Research, which specializes in forensic financial research.

It described Nikola's list of problems. Its authors called the startup a "convoluted fraud built on lies," noting that they "have never seen a hoax of this magnitude in a public company."

"Trevor Milton turned a lie into a public company worth $20 billion and signed partnership agreements with some leading automakers in desperate attempts to catch up with Tesla," Hindenburg Research said in a report.

Analysts are confident that the company's management has overestimated its own capabilities for the development of batteries and fuel cells. According to the authors of the report, Nikola misled partners with false statements about hydrogen fuel cell technology, which never existed in reality. They also noted a breakdown in plans to buy new technologies in the field of batteries.

GM bought a stake in Nikola

On September 8, 2020, General Motors announced the purchase of an 11% stake in Nikola to help the electric truck manufacturer launch the first commercial product. The cost of the share acquired by GM is about $2 billion.

In addition to Nikola shares, the American auto giant received the right to nominate one member to the company's board of directors. Also, under the terms of the agreement, GM will implement developed fuel cell partners around the world, except for Europe.

As we explore further uses of our technologies - the Ultium battery platform and Hydrotec fuel cells - this is an excellent test of our technology with the subsequent involvement of our expertise in development and manufacturing, GM CEO Mary Barra said commenting on the Nikola deal.

GM bought for $2 billion a stake in the manufacturer of electric trucks Nikola and will help him release the first product

The press release said that General Motors resources will allow Nikola to save about $5 billion in ten years on the development, production and homologation of batteries and power plants. In turn, General Motors expects to earn about $4 billion on the growth in the value of the shares received, the supply of batteries and the contract production of the Badger pickup truck. Assembly of the Badger is expected to begin by the end of 2022. Mary Barra says a similar agreement applies to Nikola semitrailers, opening up "huge growth opportunities" for GM.

Nikola founder Trevor Milton noted that the company will gain access to GM's many years of experience in the supply, production and testing of electric cars.

According to CNBC, the announced deal contributed to the rise in quotations of both companies. Shortly before the opening of the exchange on September 8, 2020, Nikola quotes soared by 30%, GM - by 6%. During preliminary trading, the growth rate of the value of securities reached 53% and 9.1%, respectively.^[4]

IPO on Nasdaq at a capitalization of $28.8 billion

In June 2020, the American manufacturer of electric trucks Nikola Motor debuted on the Nasdaq exchange.

At the end of the first day of trading on June 4, 2020, the value of shares reached $33.75 apiece, and the company's market capitalization amounted to about $12 billion.

The largest owner of Nikola Motor shares - the founder of the company Trevor Milton - became a billionaire. The cost of his share is estimated at $3.7 billion.

By the close of the Nasdaq exchange on June 9, 2020, the value of Nikola Motor shares was $79.73, and the market capitalization was $28.8 billion, which is more than Ford Motor and Fiat Chrysler Automobiles (FCA). At its peak, the price of the manufacturer of electric trucks reached almost $94.

The manufacturer of electric trucks Nikola went public. It was estimated at $12 billion without a finished product

The rise of Nikola shares caused a mixed reaction from observers. Bloomberg reports that if skeptics have long doubted the objectivity of Tesla's market value, which nevertheless produces and sells real cars, Nikola's growth suggests that investors' courage in valuing young companies has reached a new level.

Nikola's first heavy truck is only expected in 2021. At the end of June 2020, the manufacturer will begin accepting pre-orders for the purchase of the Nikola Badger electric pickup truck, which, according to the developers, will be able to drive about 483 km without recharging. The range of the hybrid version with a fuel cell is declared at 965 km.

In the months leading up to the IPO, interest in Nikola grew not only from investors but also from automotive component manufacturers, Trevor Milton said. That was partly thanks to the arrival on Nikola's board of directors of Steve Girsky, a former vice chairman of General Motors "board of directors. Nikola's meteoric entry into the Nasdaq came in a reverse merger with Girsky's public company VectoIQ, which was completed on June 2.

The world is moving to zero-emission platforms, and Nikola Motor Company is the leader in creating such machines for difficult operating conditions. We believe we have a differentiated business model based on the economy rather than government subsidies. Now we need to redouble our efforts and speed up the timeline and enter the market, "Milton said.

Nikola, which at this time competes with Tesla in the electric truck market, plans to produce 12,000 trucks with electric motors and hydrogen by 2024.^[5]

Notes