Founder of GM electric truck partner resigns
FRANKFURT, Germany — Shares in electric and hydrogen-powered truck startup Nikola fell Monday after the company’s founder resigned amid allegations of fraud — two weeks after signing a $2 billion partnership with General Motors. The company said late Sunday that Trevor Milton resigned and the departing executive chairman said he would defend himself against accusations that the company made false claims about its vehicles, allegations Nikola rejects.
Milton said in a message to Nikola employees that he was stepping aside because “the focus should be on the company and its world-changing mission, not me.”
Shares in the company based in Phoenix, Arizona, tumbled 19% as markets fell broadly Monday. Shares of GM fell 4.7%.
A report from Hindenburg Research from Sept. 10 said Nikola’s success was “an intricate fraud” and based on “an ocean of lies” including a video showing a truck rolling downhill to give the impression it was cruising on a highway, and stenciling the words “hydrogen electric” on the side of a vehicle that was actually powered by natural gas.
Hindenburg said it had taken a short position in Nikola stock, which means it could profit if the stock goes down.
Nikola said it contacted the Securities and Exchange Commission, which is looking into Hindenburg’s allegations. News reports have said the U.S. Justice Department is investigating as well.
In a statement, Nikola said the Hindenburg report was “replete with misleading information and salacious accusations” and had hired an attorney to evaluate potential legal recourse. It has said the video did not describe the vehicle as moving under its own propulsion and that the company does have working trucks.
GM said in a statement Monday that “we acknowledge Trevor Milton’s departure from Nikola and the decision of the Nikola board to move forward.“
GM said it would go ahead and close the agreed transaction, and confirmed it would build the Nikola’s Badger, a hydrogen fuel cell and electric pickup truck.