Sept 10 2020 - Nikola: How to Parlay An Ocean of Lies Into a Partnership - Part 1

Nikola: How to Parlay An Ocean of Lies Into a Partnership With the Largest Auto OEM in America

by Hindenburg Research

(NASDAQ:NKLA)

• 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.
• We have gathered extensive evidence—including recorded phone calls, text messages, private emails and behind-the-scenes photographs—detailing dozens of false statements by Nikola Founder Trevor Milton. We have never seen this level of deception at a public company, especially of this size.
• Trevor has managed to parlay these false statements made over the course of a decade into a ~ billion public company. He has inked partnerships with some of the top auto companies in the world, all desperate to catch up to Tesla and to harness the EV wave.
• We examine how Nikola got its early start and show how Trevor misled partners into signing agreements by falsely claiming to have extensive proprietary technology.
• We reveal how, in the face of growing skepticism over the functionality of its truck, Nikola staged a video called “Nikola One in Motion” which showed the semi-truck cruising on a road at a high rate of speed. Our investigation of the site and text messages from a former employee reveal that the video was an elaborate ruse—Nikola had the truck towed to the top of a hill on a remote stretch of road and simply filmed it rolling down the hill.
• In October 2019, Nikola announced it would revolutionize the battery industry. This was to be done through a pending acquisition, but the deal fell through when Nikola realized (a) the technology was vaporware and (b) the President of the battery company had been indicted months earlier over allegations that he conned NASA by using his expense account to procure numerous prostitutes.
• Nikola has never walked back claims relating to its battery technology. Instead, Trevor continued to publicly hype the technology even after becoming aware of the above issues. The revolutionary battery technology never existed – now, Nikola plans to use GM’s battery technology instead.
• A spokesman for Volvo spin-off Powercell AB, a hydrogen fuel cell technology company that formerly partnered with Nikola, called Nikola’s battery and hydrogen fuel cell claims “hot air”.
• In addition to now using GM’s battery technology, Nikola seeks to use the automaker’s production and fuel cell capabilities. Nikola seems to be bringing nothing to the partnership but concept designs, their brand name and up to 0 million they will be paying GM for costs related to production.
• Inexpensive hydrogen is fundamental to the success of Nikola’s business model. Trevor has claimed in a presentation to hundreds of people and in multiple interviews to have succeeded at cutting the cost of hydrogen by ~81% compared to peers and to already be producing hydrogen. Nikola has not produced hydrogen at this price or at any price as he later admitted when pressed by media.
• Trevor has appointed his brother, Travis, as “Director of Hydrogen Production/Infrastructure” to oversee this critical part of the business. Travis’s prior experience looks to have largely consisted of pouring concrete driveways and doing subcontractor work on home renovations in Hawaii.
• Claims of owning energy producing assets is not new for Nikola. Trevor claimed that Nikola’s headquarters has 3.5 megawatts of solar panels on its roof producing energy. Aerial photos of the roof and later media reports show that the supposed panels don’t exist.
• At one point Nikola claimed to own its own natural gas wells. There is no evidence in company filings to support this. The claims were eventually quietly removed from Nikola’s website.
• Trevor claims Nikola designs all key components in house, but they appear to simply be buying or licensing them from third-parties. One example: we found that Nikola actually buys inverters from a company called Cascadia. In a video showing off its “in-house” inverters, Nikola concealed the Cascadia label with a piece of masking tape.
• In a July 2020 podcast, Trevor said of Nikola’s “Tre” truck: “We have five of them coming off the assembly line right now in Ulm Germany.” A spokesperson for Bosch, the manufacturing partner building the trucks, confirmed this month that they haven’t made any trucks yet.
• The company’s Nikola One “reveal” was a total farce. We corroborate Bloomberg’s earlier work debunking Trevor’s claims regarding its semi-truck that “this thing fully functions and works…this is a real truck” and provide new evidence.
• We present behind-the-scenes photos showing that Nikola had an electricity cable snaked up from underneath the stage into the truck in order to falsely claim the Nikola One’s electrical systems fully functioned.
• We learned through emails and interviews with former partners that Trevor had an artist stencil “H2” and “Zero Emission Hydrogen Electric” on the side of the Nikola One despite it having no hydrogen capabilities whatsoever; it was built with natural gas components.
• We also present evidence that subsequent “reveals” were fictitious. In 2019, Nikola revealed a “next generation” version of its off-road vehicle. We learned that it was scrapped within weeks of the unveiling due to manufacturing challenges. The redesign work was then quietly outsourced.
• Nikola’s much-touted multi-billion dollar order book is filled with fluff. U.S. Xpress reportedly accounts for a third of its reservations, representing ~.5 billion in orders. U.S. Xpress had only .3 million in cash on hand last quarter.
• Nikola’s key partners and backers have been cashing out aggressively. Worthington, Bosch and ValueAct have all sold shares. Worthington sold 7 million shares over a 2-day span in July and another 0 million in August. We think they know exactly what type of company Nikola is, and we expect that as Nikola’s GM “partnership” boosts the stock price, key holders will continue to exit.
• We think Trevor Milton, through dozens of outright lies, was able to form partnerships with some of the largest legacy auto companies in the world in their desperation to catch up to Tesla’s EV leadership status.
• Trevor has ensured he is not going down with the ship.  He cashed out million around the IPO and amended his share lock-up from 1-year to 180 days. If he is fired, his equity awards immediately vest and he is entitled to collect million over two years. Milton has laid the groundwork to extract hundreds of millions from Nikola years before ever delivering on his promises.
• Every now and then a story comes around that exposes how little the “experts” really know. Theranos inked partnerships with Walgreens, Safeway, and Cleveland Clinic and staffed its board with luminaries. We think Nikola’s partners did not do their homework.

Initial Disclosure: After extensive research, we have taken a short position in shares of Nikola Corp. This report represents our opinion, and we encourage every reader to do their own due diligence. Please see our full disclaimer at the bottom of the report.

Background: A Relentless Tesla Rally Pressured General Motors and Other Legacy Automakers to Catch Up

The underlying narrative for the electric vehicle market in 2020 has undoubtedly been Tesla’s relentless rally, which recently culminated in the company being valued with a market cap of over 0 billion at its peak—more than time-tested names like GM, Ford, Daimler and Fiat – combined.

Unlike Nikola, Tesla develops extensive proprietary technology, which cuts many traditional automakers and suppliers out of its picture. The astronomical rise in Tesla’s valuation has pressured other auto companies, like General Motors, to unlock similar value from the ongoing EV wave. In August 2020, analysts from Deutsche Bank and Morgan Stanley pressed General Motors to spin off its electric vehicle business, stating that such a move dedicated to EV could be worth “up to 0 billion”.

“Nothing is off the table,” GM CEO Mary Barra said at the time, appeasing analysts and winning a price target boost from Morgan Stanley shortly thereafter.

Background: GM Temporarily Staves Off Pressure From Analysts And Stakeholders By Entering Into A Strategic Partnership with Nikola

On the morning of September 8, 2020, Nikola announced a strategic manufacturing partnership with General Motors, sending shares of both companies sharply higher.

For many, the deal was viewed as long-awaited validation for Nikola, which to date has mainly presented little but prototypes, renderings and a heap of promises. After all, General Motors is one of the largest, multinational auto manufacturers on the planet and has been in business for over 100 years. It has reach into every major auto market, including the U.S., Europe and China.

Economically, GM gets a billion in stock (an 11% stake) in Nikola for non-cash contributions such as engineering and validating a truck for Nikola, 0 million in expense reimbursements, supply contracts and 80% of the EV credits, along with a host of ‘outs’. GM can begin selling shares before a single truck rolls off the line. Essentially, it’s a free call option in a “sexy” EV story for General Motors.

But why sign with Nikola at all? GM’s CEO was asked on the day of the announcement what technology GM would get out of the deal. She couldn’t name a single thing.

The real “value” for GM seems to be branding. We believe the legacy automaker simply seeks to latch General Motors’ storied name onto Nikola’s charismatic Founder and Executive Chairman, Trevor Milton. Trevor is perceived by many as a forward-thinking, fresh, visionary entrepreneur capable of rivaling Elon Musk’s allure.

But in GM’s attempt to keep up with Elon Musk, who did they just get into bed with?

Introduction: Who is Trevor Milton?

“I never deceived anyone!”—Nikola Executive Chairman Trevor Milton

What is the difference between a visionary selling a daring view of the future and a con artist?

Tech founders are often accused of being overly rosy with their projections. Supporters credit such founders as having bold, forward-thinking plans while detractors accuse them of knowingly selling unrealistic promises.

While such debates among optimists and pessimists are common, most everyone can agree that there is a difference between being overly optimistic about the future and outright lying.

Credibility is important for any management team, but this is especially true of a company like Nikola that has virtually no revenue and no shippable product. Given Nikola’s market cap as of this writing, the company is a ~ billion promise of what it can achieve in the future.

And Trevor Milton is as “key man” as it gets. Per Nikola’s filings:

“Mr. Milton is the source of many, if not most, of the ideas and execution driving Nikola” [Pg. 45].

In Trevor’s post-Q2 CNBC interview, he said he let Nikola’s CEO and CFO handle the earnings call because he “wanted them to feel like they have a voice in the company”. (Aug 5th CNBC, 3:34)

What follows is a deep dive on the origins of Nikola Corp. and its founder Trevor Milton.  

What we found is that, for over a decade, instead of developing his own capabilities, Trevor has established an undeniable track record of taking from others and claiming technology as his own. He has quietly used off-the-shelf products from third-parties while loudly claiming to have vast proprietary technology.

Trevor would then leverage what he had and repeatedly mislead customers, partners, and investors in order to build his credibility and take his concept to the next level.

This pattern of behavior continues to this day, now with billions of dollars on the line and with Nikola tied to some of the largest auto companies in the world.

Our work for this report involved speaking with multiple whistleblowers, business partners, and former employees as well as reviewing extensive internal documentation from Trevor’s ventures leading up to Nikola, including emails, text messages, recorded conversations and behind-the-scenes photographs.

Based on our findings, we believe Nikola is an intricate fraud built on dozens of lies over the course of its founder Trevor Milton’s career, which he has parlayed into a billion cloud of smoke and partnerships with some of the top auto companies in the world.

Part I: Trevor Milton’s Career Path Leading Up to Nikola

 

November 2009: Trevor Milton Launches dHybrid, Inc. with a Partner, Kicking off his EV Trucking Journey. It Ended in Litigation With Allegations of Misappropriation and False Promises

After dropping out of college, Trevor Milton started an alarm sales company in Utah called St. George Security and Alarm. He eventually exited the business for 0,000. Our interview with its buyer indicated that Trevor overpromised, resulting in a total loss for the initial acquirer. We also interviewed Trevor’s “50/50” business partner who indicated he was led to believe the exit was much smaller, saying he ultimately received only 0,000 for his “50%”.

Following the alarm business exit, Trevor launched an online classified ads website that sold used cars, called uPillar.com, which eventually failed. (For more on both of these early businesses, see the Appendix at the end of this report.)

Following those two early pursuits, Trevor’s initial foray into alternative energy vehicles was a company called dHybrid, Inc. Trevor joined forces with an engineer named Mike Shrout who had developed compressed natural gas (CNG) conversion technology for diesel engines. Shrout was to bring the technical expertise to the venture while Trevor would bring his business experience.

It Got Off to a Good Start: dHybrid Entered into Agreement with Major Trucking Company Swift to Convert Up to 800 Trucks, a Contract Valued at Million

Shortly after launching dHybrid, Trevor contacted Jerry Moyes, CEO of Swift Transportation to market dHybrid’s conversion technology, according to a source familiar with the company. The team demonstrated the technology on a converted pickup truck to Moyes at Swift’s Phoenix facility.

Moyes was apparently impressed with the demo and Swift eventually signed a development agreement, paying million for a 9% stake in dHybrid, as well as extending a 2,000 loan to the company. The agreement, which we located through litigation records, called for the conversion of an initial 10 trucks for testing with a commitment to convert 800 trucks thereafter.

Swift Later Sued, Alleging the Company Delivered Only 5 Trucks That Didn’t Work and That dHybrid’s Officers Misappropriated Capital for Personal Use

The deal immediately hit roadblocks, as dHybrid failed to deliver on its agreement. Swift filed a lawsuit in mid-2012. A subsequent amended complaint alleged that only 5 trucks had been delivered instead of the promised 10, that the performance of the trucks didn’t to live up to the initial promises, and that capital had been misappropriated by dHybrid’s officers.

In the Lead-Up to the Lawsuit, Trevor Reached out to New Investors Claiming the Swift Contract Was Worth 0-0 Million

Reality: We Have the Contract. It Was Only Million

As dHybrid’s million in startup capital was running out, Trevor reached out to new investors, making bold claims about the size of the Swift contract and how well the technology was performing.

This includes an email to Anthony Burns, the former CEO of Ryder Systems, shown below. In the email, Trevor makes several claims that appear to be outright fabrications, based on litigation records and conversations with a former business partner:

1. “So far we are saving Swift 38% on their fuel bill.” At the time, the Swift data showed savings of no higher than 24%.
2. “We have logged over half a million miles of data pulling 80,000 pound loads.” These numbers were apparently similarly inflated.
3. “We have signed a 0 million dollar plus contract with Swift”. The contract was only for million, as per Swift’s lawsuit, and as corroborated by our source familiar with the agreement.

In another dHybrid investor presentation we reviewed, one slide cites the Swift contract as being 0 million, triggered when EPA certification is achieved:

But once again, per the Swift lawsuit, we see clearly that the contract value was only million. [Pg. 10]

Following the Swift Litigation, dHybrid Sought a Buyout But the Deal Ended in More Litigation, With the Buyer Alleging dHybrid Made Numerous Misrepresentations About its Capabilities

In dire financial straits, Trevor sought to negotiate a buyout with a company called Sustainable Power Group LLC (“sPower”) based in Salt Lake City, Utah.

The parties entered into negotiations and signed a term sheet in May 2012, but only one month later in June, sPower exercised the termination clause and backed out of the agreement citing significant misrepresentations during their due diligence process.

Shortly after, when dHybrid disputed sPower’s findings, sPower filed a lawsuit alleging:

1. dHybrid had not, as represented, completed development of the dHybrid System.

• dHybrid had not begun the EPA certification process as dHybrid had claimed.

• dHybrid had been mispresenting results obtained from the five Swift diesel semi-trucks that were using the dHybrid System.  Specifically, sPower discovered that dHybrid materially misrepresented the fuel-blend ratios achieved by these diesel trucks.

• dHybrid had falsely represented the fuel-cost savings achieved by Swift as a result of using the dHybrid System. 

• dHybrid was often having trouble interpreting data it received from Swift’s drivers. Rather than seek clarification or perform more detailed test runs with the dHybrid Systems, dHybrid elected to fill in the gaps in the data with assumptions it created. 

2012: Trevor Pitched Investors on His Team, Including an Experienced CTO—But the Named Individual Was Never dHybrid’s CTO

In the Spring of 2012, with dHybrid under pressure to raise additional capital, Trevor prepared a presentation for the Park City Angels, a venture capital group in Salt Lake City. In that presentation, Trevor falsely claimed that the company had an experienced Chief Technology Officer.

The presentation, which we reviewed, contains a slide listing dHybrid’s management team. The CTO is the only individual in the group identified by his initials: “S.S.” rather than his full name.

The CTO’s employment and educational background, however, including a MS degree from the University of Michigan and work experience at General Motors and Parker Hannifin, matched that of dHybrid contractor Steve Scott.

An individual familiar with dHybrid’s operations said that Scott never held the position of CTO. He had only worked on various proof-of-concept projects for dHybrid as an outside consultant.

2012: With dHybrid Mired in Litigation, Trevor Started a New Company With his Dad, Choosing a Very Similar Name, dHybrid Systems

Trevor Then Falsely Claimed to Prospective Partners That ‘dHybrid’ Had Been in Operation for Years

With dHybrid mired in litigation and a suspended state of existence, Trevor and his father Bill Milton launched dHybrid Systems, LLC in October 2012. The new company quickly resumed its focus on CNG fueling systems except Trevor and his father now owned the entity, leaving Trevor’s former partners with nothing.

With the similar name of dHybrid Systems, Trevor was able to suggest to prospective clients, partners and investors that the new company was a continuation of dHybrid and its years of experience and achievements.

We reviewed an example of such marketing materials that falsely suggested dHybrid Systems began in 2011, when in fact the entity had been formed in October 2012.

Here are the incorporation records for comparison:

2014: dHybrid Systems Was Then Acquired by Worthington—A Successful Exit…For Trevor

We Learned from a Former Employee (In a Recorded Call) That dHybrid Concealed Potentially Fatal Product Issues from Worthington In Order to Get the Deal Done

By 2014, Trevor had found a buyer for his new company, industrial manufacturing heavyweight Worthington Industries (NYSE:WOR). Worthington paid .9 million for a 79.59% stake in the entity, valuing the entire company at .9 million. [Pg. 15]

In recent interviews, Trevor has overstated the exit value. In a 2019 interview with Trucks.com, for example, he claimed that his .9 million exit was for “much more than million”.

Getting back to the deal at the time, it appears Trevor overpromised on the capabilities of the technology and its effectiveness in the field.

In recorded conversations, former employees of dHybrid Systems admitted to traversing the country in a mad dash to patch up dHybrid’s broken systems as best possible, concealing the issues from Worthington so that the deal could close. Per the conversation [click for audio]:

• “I helped design and develop and fix all these repairs that Worthington didn’t know about. But I was in the field making repairs so that they wouldn’t find out about it.”
• “These back-of-cab units were actually falling off of the trash trucks, like, breaking off. They were shearing the damn frickin’ frames and then coming off, like nearly friggin’ causing deaths.”
• “I was the guy in the field making sure (Worthington) didn’t find out. If they had found out that would have ruined the deal.”

The company in question was Waste Pro. Here is a picture of one of its trucks converted for CNG from dHybrid.

Using Worthington’s Credibility, Trevor Then Apparently Made False Claims About Nikola’s “Proprietary” Technology in Order to Induce Partners to Work with Him

According to former employees of EVDrive, they signed with Trevor based not only on his supposed leadership role at Worthington but also on a belief that Nikola (named Bluegentech at the time) had advanced proprietary turbine technology that would make for a good fit with their own technology.

Trevor represented that he had proprietary turbine technology in a contract signed with EVDrive in May 2015, which we’ve procured a copy of:

The agreement reiterated that the turbine was “Bluegentech’s proprietary turbine system”.

But that appears to have been false as well. Two months after Bluegentech represented to EVDrive that it owned proprietary turbine technology, Trevor’s entity was in negotiations with another company called Brayton Energy to purchase their turbines. Once again, we have the email record to prove this.

The turbine purchases were stated to be on behalf of Worthington, which Trevor was working with at the time:

Trevor leveraged his Worthington role, in addition to claims of having proprietary technology to draw in partners that could collectively help piece together parts needed for Nikola’s first EV truck.

As we will show later, the claims of having “proprietary” technology that is actually someone else’s product appear to be an ongoing phenomenon with Trevor to this very day.

December 2015: Worthington Promptly Wrote Down the Value of dHybrid Assets

About a year after the deal, Worthington identified problems with the dHybrid Systems acquisition and recorded a .3 million impairment related to the acquisition in Q4 2015. [Pg. 53] The company further recorded a .5 million warranty-related expense relating to dHybrid in 2016. [Pg. 3]

As we detail in the Appendix to this report, Worthington had a deep relationship with Nikola, which it now appears to be attempting to downplay and distance itself from. At one point, Nikola was a subsidiary of Worthington and the close relationship gave Trevor enough credibility to cobble together several early partnerships.

Part II: Nikola

 

2016: After Cobbling Together Truck Parts with Deceptively Constructed Partnership Agreements, Nikola Announced it Would Revolutionize Transportation

Bluegentech then became Nikola, and Trevor continued to line up supplier deals in an attempt to get the pieces together to assemble the company’s first truck with third-party parts.

According to former employees and partners working on the Nikola One, the company’s first proposed semi-truck, progress was slow. Nevertheless on May 9th 2016, Nikola came out of ‘stealth mode’, announcing that it had developed a product that would revolutionize the field of transportation.

The press release vowed to unveil the Nikola One in December, committing the company to an aggressive deadline.

December 2016: The Big Nikola One Reveal —“This Truck is By Far the Most State of The Art Truck Ever Built in History…This Thing Fully Functions and Works…This is a Real Truck—This is Not a Pusher”

Reality: It Was Not A Real Truck And Was, In Fact, A Pusher

By the end of the year, Nikola was poised to reveal its revolutionary new truck, the Nikola One. In the months leading up to the presentation, a user asked Nikola whether the truck would be a “design unveiling or a functional prototype”. Nikola confirmed that it would be a “functioning” and “fully built truck at event”.

At multiple points during a video recording of Trevor’s presentation at the launch event on December 1, 2016, Trevor can be heard making it crystal clear that the Nikola One was a fully functioning truck:

At the 17:30 mark:

“You’ll see it up on the screens–they’re fully functioning screens. Really incredible. We will have a chain on the seats to prevent people from coming in just for the safety. I don’t want someone to end up doing something and driving this truck off the stage…so we’re going to try to keep people from driving off. But this thing fully functions and works, which is really incredible.”

Trevor then closed the presentation by insisting 3 times that the truck was real, at the 39:00 mark:

“For every doubter out there that said there’s no way this is true. How can that be possible? We’ve done it. It’s my pleasure to actually let you guys enjoy the night, see the truck, know it’s real, touch it, feel how sturdy it is. You’re going to see that this is a real truck. This is not a pusher. Thank you so much everyone!”

For anyone unsure what a “pusher” is, Trevor actually clarified in another video at the event and again reiterated that the truck was fully functioning and complete in response to an interviewer’s question:

Q: “So how long have you been working on this because this is a fully functioning truck right?

Trevor: “Yeah”

Q: “So how long have you guys been working on this?

Trevor: “Years in secrecy. It’s been very hard. Some of the people found out about us over the last 4 or 5 months as we announced in the lead-up to this big event, but it took years and years to get here. This isn’t just a pusher like a lot of vehicles that they unveil [that] are just vehicles that don’t actually function. This is a fully functional vehicle which is really incredible. You can go through. We can change out whatever they want, all the temperatures. I mean this is a fully functioning vehicle; it’s not just a pusher. That’s what they call [it] in the automotive world; they just push and it doesn’t move.”

It turns out it was a pusher.

Bloomberg Later Identified That the Truck Was NOT Completed.

Trevor Responded by Admitting This, Then Claimed He NEVER Said it Was Completed (Despite Video Clearly Contradicting Him).

He Then Threatened to Sue Bloomberg

In June of this year, Bloomberg published a piece highlighting that, contrary to Trevor’s claims, the truck was not complete and was missing components.

In response, Trevor blasted the reporter on Twitter and immediately vowed to sue, claiming that everyone knew the truck wasn’t operable and that the parts were sitting right on the table in front of the audience the whole time:

It was a bold retort. But it was completely invalidated by Trevor’s own words – multiple times – including on video at the event and in Tweets leading up to it.

In the video of the event, we saw no such table with truck gears and components clearly visible to all. Instead, the seating went right up to the stage except for a small table with a computer monitor up front:

 

In either case—if there was a table with gears (somewhere), we fail to see how that in any way corrects Trevor’s repeated false claims during the presentation that the truck was fully functional.

Bloomberg Was Right. The Reveal Was a Farce. More Evidence Corroborates the Bloomberg Piece and Furthers Their Allegations

We have behind-the-scenes photos and other evidence showing just how incomplete the Nikola One was at the time of the 2016 reveal.

In late August, just 3 months before the show, Nikola’s “truck” consisted largely of frame rails with wheels mounted to its Meritor suspension.

(Source: Individual who worked on the Nikola One “Truck” in Late August 2016)

Other components had not yet arrived, including the e-axles, the turbine, the natural gas fueling system, and the body — according to a source who worked on the job. The factory was not even set up for production. Workers were running to the hardware store to pick up basic parts, according to the source.

August 2016 (4 Months Before the Show): Nikola Claimed to Have Engineered “The Holy Grail” Of Hydrogen Technology For Trucking, Despite No Apparent Evidence it Had Even Begun Development

Amidst all this, the company abandoned its supposedly revolutionary compressed natural gas (CNG) technology with no explanation. At the beginning of August, Nikola abruptly announced that it had pivoted from a (CNG) turbine range extender to a hydrogen fuel cell range extender.

The press release claimed that the technology had already been engineered successfully.

The press release boasted that this achievement was the holy grail of trucking:

“Nikola has engineered the holy grail of the trucking industry. We are not aware of any zero emission truck in the world that can haul 80,000 pounds more than 1,000 miles and do it without stopping. The Nikola One requires only 15 minutes of downtime before heading out for the next 1,000 miles.”

Despite these claims, there was no in-house hydrogen capabilities and no hydrogen partners were brought on board, according to former partners working in the lead-up to the show. The announcement was a shock to even those involved with the company, according to our sources.

In May 2016, 3 months prior to the hydrogen “pivot”, the company announced it had begun taking reservations for the natural-gas-powered Nikola One, which it claimed to have already “engineered, developed, and is finalizing assembly.” It even promised purchasers free compressed natural gas fuel.

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