Nikola Founder Trevor Milton Sentenced to Four Years in Prison for Lying to Electric Vehicle Investors

Main Facts:

Trevor Milton, founder of hydrogen electric truck company Nikola, has been sentenced to four years in prison after a jury found him guilty last year of defrauding investors by lying about “all aspects” of his business.

Key Background:

In 2014, Milton founded Nikola, which began producing hydrogen-powered semi-trucks in Salt Lake City, Utah. The company’s first vehicle, the Nikola One, was unveiled as a completed product in 2016, but prosecutors said the truck was “completely lacking in important parts, including gears, engines, and control systems.” Nevertheless, Milton continued to accept orders for the incomplete truck, including a large order for 800 trucks from beverage giant Anheuser-Busch. Milton used the hype surrounding his new company to take it public in 2020, which opened in June 2020. According to allegations, Milton specifically targeted inexperienced and unskilled investors by lying or making misleading statements “through social media, television, newspapers, and podcast interviews.” Milton claimed that orders from companies like Anheuser-Busch represented billions of dollars in revenue – without mentioning that they could be canceled at any time. After the company went public, the former executive was added to Forbes’ billionaire list, where he remained for two years. His last estimated net worth was $1.4 billion in 2021.

Stunning Fact:

Before taking the company public in 2020, Milton unveiled the Nikola Badger, a hydrogen pickup truck, claiming that the company designed it “from the ground up” using in-house components. However, investigators found that the new vehicles were Ford F-150s, modified by employees to match the company’s futuristic aesthetic. Prosecutors described the prototypes of the Badger as “just small display cars” that could not be driven on the roads. At that time, Milton claimed the Badger would hit the market in 2022 through a partnership with General Motors. However, Nikola’s contribution to the deal was greatly exaggerated. According to allegations, General Motors “planned to not use any Nikola technology or engineering, except for the general aesthetic and potential entertainment system.” The deal with General Motors failed after eight months.

Source: https://www.forbes.com/sites/zacharyfolk/2023/12/18/nikola-founder-trevor-milton-gets-four-years-in-prison-for-lying-to-ev-startup-investors/