Nikola
From Invertopedia, the encyclopedia of how things fail
Nikola was a Phoenix maker of battery and hydrogen trucks, founded by Trevor Milton in 2014[1][5][7]. It went public through a SPAC in June 2020 at a $34 billion valuation with no revenue[1]. A promotional video of its truck in motion turned out to show the prototype rolling down a hill[2][8]. Milton was convicted of securities and wire fraud in 2022 and sentenced to 48 months[1][4], Nikola filed for Chapter 11 on February 19, 2025[6], and President Trump pardoned Milton the next month[4][5].
Contents
The bet
Trucking would go zero-emission, and the company that showed the most convincing future truck first would win the capital to build it. Listing through a SPAC let a young company market its projections rather than its results[1]. In June 2020 that was enough for a valuation of $34 billion, more than Ford at one point, with no revenue[1].
What happened
| 2014 | Trevor Milton founds Nikola, named after Nikola Tesla.[1][2] |
|---|---|
| 2018 | Nikola releases an "in motion" video of its truck. It had been rolled down a hill.[2][8] |
| Jun 2020 | Nikola lists through a SPAC and is valued at $34 billion, more than Ford at one point, with no revenue.[1] |
| Sep 2020 | GM announces it will build Nikola's Badger pickup. On September 10, short seller Hindenburg Research calls Nikola "an intricate fraud built on dozens of lies." Nikola does not deny the truck in the video was rolling downhill. Milton resigns as executive chairman and says he will fight "false accusations."[2][3][8] |
| Jul 29, 2021 | Federal prosecutors in Manhattan unseal an indictment charging Milton with securities fraud and wire fraud. The SEC charges him the same day.[3] |
| Dec 21, 2021 | Nikola settles with the SEC and agrees to pay a $125 million civil penalty, without admitting or denying the findings.[3][6] |
| Oct 14, 2022 | A jury finds Milton guilty on one count of securities fraud and two counts of wire fraud.[1][3] |
| Dec 18, 2023 | Milton is sentenced to 48 months in prison and three years of supervised release. He stays free pending appeal.[4][5] |
| Feb 19, 2025 | Nikola files for Chapter 11 in Delaware with about $47 million in cash, and seeks to auction the business.[6] |
| Mar 2025 | President Trump pardons Milton. The Justice Department lists the pardon on March 27, and the White House confirms it a day later.[4][5] |
The kill shot
The company sold the story faster than it built the truck. When the gap between the pitch and the product came out, the trust that held up the stock went with it.
Prosecutors said Milton falsely claimed Nikola had built its own truck when it was a General Motors product with Nikola's logo on it[5][6], and AP reported evidence that the company's videos of its trucks were doctored to hide their flaws[6]. The best-known example was the video of a truck apparently driving down a desert highway that, prosecutors said, was non-functional and had been rolled[2][6]. At sentencing, U.S. Attorney Damian Williams said "fake it till you make it" is not an excuse for fraud[5].
The trucks that did ship were not enough to fill the hole. By its bankruptcy, CEO Steve Girsky said fundraising, cutting liabilities and preserving cash "have not been enough" against market and economic pressures shared across the EV industry[6][7].
Red flags ignored
- A valuation with no revenue. $34 billion at listing, before selling a truck in volume.[1]
- The demo was staged. The "in motion" video showed a truck rolling down a hill.[2][8]
- Someone else's parts. Prosecutors said the truck Milton claimed Nikola built was a GM product with Nikola's logo on it.[5]
- Renderings sold as products. The Badger pickup never went beyond renderings.[1]
- A founder prone to exaggeration. Nikola's own CEO testified that Milton "was prone to exaggeration" when pitching investors.[5]
The cost
A $34 billion valuation at listing[1] ended in Chapter 11 with about $47 million in cash; the shares fell more than 47 percent before the market opened the day of the filing[6]. Nikola paid a $125 million SEC civil penalty in 2021[3]. Its Arizona plant and headquarters sold to Lucid for $30 million, and it got back 2 cents on the dollar of a $50 million hydrogen project investment[7].
Prosecutors had sought hundreds of millions of dollars in restitution for defrauded investors, which AP reported the pardon could wipe out[5].
The inversion
If you need to stage the demo, you're not ready to show it. Raise on what the product does today, and let investors see it working under its own power.
What survived
The buildings and some of the people. Lucid bought the Coolidge, Arizona plant and the Phoenix headquarters for $30 million and planned to offer jobs to more than 300 former Nikola employees; the truck technology, the fleet and the Hyla hydrogen fueling business were not part of that deal[7].
The case record stands. The conviction was never overturned on appeal; the pardon came while Milton's appeal was pending[4][5]. The SEC ended its civil case against Milton in September 2025, months after the pardon[9]. In Nikola's bankruptcy, a judge ruled that the pardon did not amount to a finding of innocence and pushed Milton's nearly $70 million claim against Nikola to the back of the creditor line; Milton appealed that ruling to the federal district court in Delaware[10].
References
- ^ “Nikola founder Trevor Milton convicted of fraud for misleading investors”. Bloomberg via Fortune (Chris Dolmetsch, Edward Ludlow), October 14, 2022. The verdict on one securities and two wire fraud counts, founded in 2014, the June 2020 SPAC listing at $34 billion with no revenue, the Badger renderings, Hindenburg.
- ^ “Founder Of Zero-Emissions Truck Startup Resigns After Fraud Allegations”. NPR via High Plains Public Radio (Camila Domonoske), September 21, 2020. Milton's resignation and quotes, Hindenburg's "intricate fraud" claim, the downhill video and Nikola's non-denial, the GM Badger deal, founding in 2014.
- ^ “Nikola Corp. Form 10-K for 2022”. Nikola filing with the SEC, 2023. The September 10, 2020 short-seller article, the July 29, 2021 indictment and SEC charges, the December 21, 2021 $125 million SEC penalty, the October 14, 2022 verdict.
- ^ “Clemency Grants by President Donald J. Trump (2025-Present)”. U.S. Department of Justice, Office of the Pardon Attorney. Milton's pardon dated March 27, 2025; offense; sentence of 48 months and three years' supervised release on December 18, 2023.
- ^ “Trevor Milton, Nikola electric semitrucks founder convicted of fraud, pardoned by Trump”. AP via KJZZ (Greg Hahne), March 28, 2025. The pardon and White House confirmation, Milton free pending appeal, restitution, the GM-truck claim, the CEO's testimony, Damian Williams's quote.
- ^ “Electric vehicle maker Nikola files for bankruptcy protection”. AP via WSET (Michelle Chapman), February 19, 2025. Chapter 11 in Delaware, about $47 million cash, the auction motion, Girsky's statement, the 47% premarket fall, the GM truck and rolled-truck video claims, the four-year sentence, the $125 million SEC settlement.
- ^ “Lucid to Take Over Nikola's Arizona Electric Truck Plant, HQ”. Transport Topics (Keiron Greenhalgh), April 11, 2025. Lucid's $30 million purchase, 300+ jobs, the Wabash 2-cents recovery, unsold truck IP and Hyla, the February 19 filing, Girsky's quote.
- ^ “Nikola Founder Trevor Milton Steps Down Amid Fraud Allegations”. The Drive (Patrick George), September 21, 2020. Nikola admitting it rolled a non-running truck down a hill for a 2018 "in motion" video; the resignation.
- ^ “SEC Drops Suit Against Nikola Founder After Trump's Pardon”. Law360 (Gina Kim), September 11, 2025. The SEC ending its civil enforcement action against Milton after the pardon.
- ^ “Nikola Bankruptcy Appeal Tests the Reach of Trump's Pardon Power”. Bloomberg Law (Angélica Serrano-Román), February 4, 2026. The bankruptcy court ruling that the pardon is not a finding of innocence, Milton's nearly $70 million claim pushed to the back of the line, and his appeal in Delaware district court.