Has another bubble burst in the electric car market? Nikola Corporation accused of fraud

Has another bubble burst in the electric car market? Nikola Corporation accused of fraud
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Hindenburg Research gave a lot of facts about how Nikola and its Executive Chairman lied to investors and ordinary people

The rapid development of the electric car industry is not without scandals, which is understandable: the price of an entrance ticket into the industry is much lower than in the case of internal combustion engines, and the flight for imagination in terms of design and capabilities is endless. Therefore, various startups in this industry and more of those in related sectors are growing day by day. Not all of them reach the stage of mass production though. It may happen that the hype about Nikola Corporation startup, which promised to satiate the market with electric and hydrogen trucks, as well as with electric pickup trucks, is just a fiction and simulation of innovation to get investments that are later cashed out.

The analytical company Hindenburg Research published a revealing material about Nikola Corp. The report points to massive cases of fraud and outright lies by Nikola about “their” technologies. Analysts claim that they have collected an extensive database of evidence of fraud, based on recordings of phone calls, text messages, and emails. “We have never seen this level of deception at a public company, especially of this size. Trevor [Trevor Milton, head of Nikola] has managed to parlay these false statements made over the course of a decade into a $20 billion public company,” the report begins. And then, the report talks about further details of the company’s PR mismanagement.

For example, a video called “Nikola One in Motion,” which showed a Nikola one truck moving along the road at high speed, was called an “elaborate ruse”. It turns out that Nikola employees towed the truck to the top of a hill on a remote section of a road and simply filmed it rolling down that hill.

Last October, Nikola promised a revolution in the battery industry — it planned to acquire some new technology from another company. But the deal went sour when Nikola realized that, first, the technology is completely useless, and secondly, the President of the battery company conned ... NASA a few months before. Interestingly enough that after the whole truth was revealed about the “miracle technology”, Trevor continued to publicly advertise it.

Another fact from the report is that in his presentations, Trevor claimed that his company managed to reduce the cost of producing hydrogen by 81% compared to competitive solutions. He assured that Nikola already produces hydrogen (the company planned two versions of its truck — a purely electric one and with a hydrogen power plant that would independently generate electricity on board). However, Nikola later admitted that she did not produce hydrogen at all.

Trevor appointed his brother Travis as "Director of hydrogen production/infrastructure", but previously Travis was engaged in ... pouring concrete driveways and home repair Hawaii.

Claims of ownership of Nikola's energy-producing assets are also fictitious. Trevor claimed that the Nikola headquarters has 3.5 megawatts of solar panels installed on the roof, but aerial photos of the roof show that these panels do not exist. Nikola also reported owning its own gas wells, but they are not reflected in the company's assets balance.

Trevor claimed that Nikola develops all the key components of its promising electric vehicles independently, but in reality, they seem to be either purchased from third-party companies, or simply licensed. For example, Nikola buys inverters from Cascadia: in a video showing inverters allegedly made in-house, Nikola hid the Cascadia sticker with a piece of paint tape.

The bottom line is: there are more than enough data that makes one doubt Nikola, its developments and management. Not surprisingly, after the Hindenburg Research report came into being the shares Nikola Corp. they fell by 13%. However, it should be noted that Hindenburg Research itself can benefit from this situation, since it owns Nikola shares and has a short position on the stock exchange. HR analysts also indicated this in the footnote to their report.

Along with Nikola shares, General Motors shares also went down, but not as significantly — by 5.6%. Earlier, the two companies agreed to jointly produce electric vehicles. It is natural that negative news about one company affects their partners.

Nikola denies all charges of lies and falsifications. The company’s website says that “…this was not a research report and it is not accurate. This was a hit job…”. Nikola says that they have been vetted by several of the most reputable companies and investors in the world. They also add that they have nothing to hide and promise to refute the Hindenburg Research’s allegations.

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