# Nikola (2014 – 2025)

- URL: https://girisimcikafasi.com/en/startup-graveyard/nikola/
- Sector: Mobility and transport
- Country: United States
- Total funding: unknown
- Cause of closure: Regulation and legal issues

## What did it do?

Nikola Corporation was a Phoenix-based US company developing battery-electric and hydrogen fuel-cell electric lorries for heavy commercial use. Named after Nikola Tesla, it was founded in Salt Lake City in 2014 by Trevor Milton. It went public through a SPAC merger in June 2020 and from 2022 delivered trucks to customers with its Nikola Tre model.

## Why did it shut down?

In September 2020 the short seller Hindenburg Research published a report accusing the company of being an intricate fraud largely orchestrated by Milton. The SEC and the US Department of Justice opened investigations, Milton resigned and GM pulled out of a joint pickup project. In October 2022 a federal jury convicted Milton on three of four counts over statements he made as CEO; the company itself was not indicted. In 2023 the company recalled every battery-electric truck it had built because of battery faults and fires. With liabilities exceeding its assets, Nikola filed for Chapter 11 in February 2025 and put its assets up for sale.

## The story

In June 2020 Nikola, which had yet to put a single truck into series production, saw its shares climb above USD 65, and for a brief moment its market value overtook Ford's. In early August the company was worth around USD 13 billion, yet its revenue for the first six months of 2020 was just USD 80,000, of which USD 36,000 came from solar panel installations done for Milton.

Trevor Milton founded Nikola in Salt Lake City in 2014. Named after Nikola Tesla, the company promised to replace diesel rigs with hydrogen fuel-cell and battery-electric heavy lorries. It claimed USD 2.3 billion in pre-orders in 2016 and, by 2019, said lease pre-orders across all models had reached USD 14 billion. In June 2020 it went public through a SPAC merger with VectoIQ, and on 8 September 2020 a partnership was announced under which GM would take an 11 per cent stake in the company.

Two days later the short seller Hindenburg Research published a report accusing Nikola of being an intricate fraud largely orchestrated by Milton. As the Financial Times verified, the Nikola One seen moving in a promotional video was not running under its own power but rolling down a gentle slope. The company called the allegations false and misleading, but the SEC and the Department of Justice opened investigations and Milton resigned on 21 September. In November 2020 GM also withdrew from the joint pickup project.

In July 2021 a federal grand jury indicted Milton on fraud charges but did not charge the company. Milton pleaded not guilty; in October 2022, however, a jury convicted him on three of four counts over statements he made as CEO, and in December 2023 he was sentenced to four years in prison. In March 2025 President Donald Trump pardoned him. Meanwhile, in 2023, the company recalled all 209 battery-electric trucks it had built to date after coolant leaks in the battery packs and fires. With liabilities exceeding its assets and its share price down to 44 cents, Nikola filed for Chapter 11 on 19 February 2025.

The Nikola case shows that a bold narrative and a towering market value are no substitute for a working product. The founder's statements turned into both a personal criminal case and a loss of trust from which the company never recovered.

## Lessons

- Keep every technical claim you make to investors and the public at a level you can document; even a promotional video can end up as evidence.
- Do not present pre-orders and reservations as a measure of scale; non-binding demand is not revenue.
- In a company built on the founder's personal narrative, set up an independent board and internal audit early; structures that can separate the company from its founder in a crisis can save it.

## Sources

- [Nikola Corporation](https://en.wikipedia.org/wiki/Nikola_Corporation)
- [Nikola Founder Is Charged With Fraud in Rebuke to Wall Street](https://www.nytimes.com/2021/07/29/business/nikola-trevor-milton-fraud.html)
- [Nikola founder Trevor Milton found guilty of fraud over statements he made while CEO of the EV company](https://www.cnbc.com/2022/10/14/nikola-nkla-founder-trevor-milton-found-guilty-of-fraud-.html)
- [Nikola: Trevor Milton sentenced to prison after fraud conviction](https://www.bbc.com/news/business-67752125)