Nikola’s deal with General Motors to have the industrial giant manufacture its Badger electric pickup truck has fallen through, and now one of the startup’s founders, Trevor Milton, is being accused of having vastly oversold how much Nikola was going to be in these GM-made trucks. In fact, according to a GM exec, there was going to be hardly any Nikola in these trucks, as the startup’s contribution was literally just skin-deep, ending with the design of the truck.
Scott Damman, a senior General Motors manager who works in the software division, testified in court against Trevor Milton and stated that
There were no components coming from Nikola. They owned the creative design, what the vehicle looked like and felt like, but all of the parts were to come from General Motors.
This is at odds with statements made by Milton in 2020, when he said referring to the Badger pickup (pictured) that GM was going to build for Nikola (in exchange for an 11 percent stake in the company then valued at $2-billion) that
It’s probably 70% Nikola, 30% GM, when it comes to the parts that are really important to us.
This all ties into the lawsuit’s wider narrative that Trevor Milton used false statements to convince “innocent investors” to buy Nikola shares. The charges were filed by the New York Attorney General’s Office in 2020 and in 2021 prosecutors added new charges against Milton regarding the purchase of a ranch in Utah – part of the purchase was made with an option to buy Nikola stock.
The former Nikola chief executive has yet to take to the stand and defend himself in court, and looking at the precedent, his indictment is not a foregone conclusion, according to analysts who believe it all hinges on his defense. He resigned from his position in September of 2020 after a report by short seller Hindenburg Research pointed out many of his exaggerations and directly accused him of fraud.