Trevor Milton, founder, and CEO of Nikola Motors had that air of a visionary about him that naturally surrounded people like Elon Musk and Steve Jobs. It’s that air of confidence that enthralls an audience when they are giving a speech or taking center stage at conferences, whether to reveal their newest innovation that was about to shape the way the world works or the latest upgrade to their number one product.
So, when they say they are going to change the way we live, that they are going to shape the way we interact with the world, people have a tendency to take them at their word.
The name Trevor Milton may not be as famous as Elon Musk and Tesla, but he had named his company after the same famous car builder, Nicola Tesla. His vision to save the planet involved changing the diesel-powered trucks that thundered up and down America’s highways from prime polluters to green warriors.
A college dropout, Milton launched Nikola Motors in 2014 with the intention of shaking up the $1 trillion trucking industry by virtually eliminating the carbon footprint these juggernauts left on the tarmac. His trucks were going to have near-zero-emissions and were going to run on compressed natural gas technology.
This had never been done before but the young visionary was determined to dedicate himself to realizing his dream of building a company to rival that of Tesla. He raised the seed capital, launched his new empire, and set about producing the first of his semi-trucks of the future.
For the first time in a long time, there was excitement around the trucking industry. The idea of a semi-truck that would be cheaper to run than diesel engines, and good for the environment attracted investors from far and wide, both from inside the industry and from those who wanted to ride the wave of the next big thing.
Two years after launching his company, Trevor Milton debuted a fully functioning model of his semi-truck at a trade show. He called it the Nikola One but rather than rely on natural compressed gas to run the engines, he was now going to be using hydrogen fuel cell technology which he asserted was more efficient.
This created even more of a buzz and the show went down a storm, even better than expected, and in January 2017 more investment capital was raised by the company. This was needed to finance the factory for building the trucks and also to start the construction of the 700 hydrogen filling stations that were going to be installed along designated trucking routes in North America. The infrastructure for Nikola Motors H2 semi-trucks was becoming reality, and there was no stopping Trevor Milton now.
Except progress was slow, and with no trucks rolling off the assembly line one year later there were murmurs of doubts echoing around the industry, specifically about the viability of the technology. Did it really work? After all, had anyone actually driven or seen one of the trucks in motion?
To quell these voices of dissent, Milton commissioned a video that clearly showed Nikola One driving down a winding road in the desert. Seeing is believing, and with the further promise that pre-production units would be available in 2019, the buzz was back on.
In theory, everything seemed fantastic, on paper, on tv commercials, and on promotional videos, the Nikola One was going to be a green game changer. At 37, Trevor Milton was on the verge of helping to save the planet, to shake up the automotive industry with his revolutionary technology, and to make himself a billionaire in the process.
The only drawback was that it was all smoke and mirrors. It was all a lie. A sham. An empty shell.
The “gift of the gab” and promoting a product with supreme confidence and charisma can go a long way in convincing investors to part with billions of dollars. What Trevor Milton did was show potential investors what they wanted to see and told them more than what they wanted to hear.
But how could he convince experienced automotive businessmen that he had developed a working hydrogen fuel cell-powered engine when everyone else had failed? And in the process build himself a company valued at over $34 billion?
Show and tell was the key. Milton marketed the product aggressively on tv, radio, the web, anywhere where he could get a captive audience. He was the quintessential con man who understood sleight of hand and how to enthrall listeners by promising them something in the not-too-distant future that would either change their lives or make them very rich. Or richer.
His first trick was the technology itself of both the compressed natural gas and the hydrogen fuel cells. In theory, on paper, both of them could work incredibly well. In practice, neither of them had ever been developed by the best engineers in the industry.
His second trick was the truck that was displayed at the motor show in 2016. It looked fantastic, performed well, showcased everything that Nikola One was going to be, but it was nothing more than an empty shell. It was literally plugged into the main supply to simulate a working computer system on board, and to show the sleek fancy design of the body for the world to marvel at.
His third trick was the video in 2018 that showed a fully functioning Nikola One hydrogen fuel cell semi-truck in motion. What the video didn’t show before the camera started recording, was the truck being towed to the top of the hill. Once there, it was simply allowed to roll downhill, gravity, not hydrogen fuel cell technology, powering it smoothly around the corners.
The bottom line was that Trevor Milton had created a fake eco-friendly truck, one that he had never even intended to be completed. The technology was fantastic when presented properly on paper, but the actual barriers to making it work were far beyond his capabilities. All he was interested in was money, in raising more and more capital.
Yet this was all hearsay, rumors, Chinese whispers. There was no proof. So the con continued.
In fact, by convincing companies like GM, BP, and Bosch to partner up with Nikola Motors, it gave him an air of legitimacy that not only squashed the murmurs of the doubters but even allowed him to attract further investment on the credibility of those big names alone.
With the dual announcement in late 2019 that his company was going to go public and the development of a high-density battery that was four times better than anything currently on the market, his company was once again buzz-worthy. Anheuser-Busch immediately placed an order for 800 of the hydrogen-electric trucks.
Unsurprisingly, Milton didn’t have the engineers or technological know-how to develop the batteries. Instead, he purchased a smaller company, called Zapgo, for $56 million who demonstrated the viability of their battery that was going to make electric cars run further for less.
He was over the moon until he realized that sometimes the con man can be conned. The battery technology they convinced him was real, that would be worth billions to his company, was nothing more than vaporware, a scam. He had been ripped off.
But that wasn’t going to slow down Trevor Milton. In June 2020 the company went public, with the false claims of a semi-truck powered by hydrogen fuel technology and a high-density battery that didn’t exist.
He avoided having to disclose the company records by doing what is called a reverse merger rather than an IPO. In this way, he didn’t have to reveal intricate details of his company while raising the capital he wanted, so no one was any wiser that they were buying stocks in a product that didn’t work as advertised.
So big was the hype around the company going public, that within the space of a week Nikola Motors was valued at over $30 billion. This valuation positioned Nikola Motors as the world’s biggest truck maker, above established companies like Ford, despite never having sold one single truck.
On September 10, 2020, two days after General Motors bought a stake in the company for $2 billion, a bombshell report came out from a short-selling investment firm called Hindenburg Research that was going to blow the wheels off the truck. All of them.
The damning report revealed the intricate fraud that Milton had perpetrated for years. The investment firm had gathered indisputable evidence against Nikola Motors from emails, text messages, recorded phone calls, and even photos from behind the scenes refuting claims from Milton about the efficacy of the technology behind Nikola One.
The game was up. Trevor Milton knew it, the board of Nikola Motors knew it, and there was no other choice but for him to step down as Chairman of the company.
All this evidence was handed over to the SEC who moved swiftly against Milton, and at the end of July 2021, he was charged with three counts of criminal fraud and released on a bail of $100 million.
Not surprisingly, the value of the stock for Nikola Motors plummeted, yet the new Chairman, Stephen Girsky, vowed to deliver a finished product as promised, somehow.
Considering that the whole company was built on an intricate web of lies, on a technology that didn’t exist and on a truck that was not much more than an empty shell, it was going to be hard to see how he could deliver on his promises.