Startups Sometimes Stretch the Truth

Nikola Corp. is an electric-truck company. “Our vision is to be the zero-emissions transportation industry leader,” it says. It went public last year by merging with a special purpose acquisition company, and was sort of the next Tesla for a while; shortly after it went public it traded at a market capitalization of about $30 billion, higher than Ford’s. Then in September a short-selling firm called Hindenburg Research published a report calling Nikola an “intricate fraud” and alleging that a lot of founder Trevor Milton’s claims about its technology were lies. The stock dropped—its market cap is about $7.5 billion now—and Milton stepped down as executive chairman. Nikola commissioned an investigation by its outside lawyers to get to the bottom of things.

Now Nikola has released the results of the internal investigation and they are … oh, you know. Did Nikola’s founder lie about whether Nikola had produced a zero-emissions truck? Yes, say Nikola’s own lawyers in Nikola’s own annual report to the U.S. Securities and Exchange Commission. Did he lie about whether the truck worked? Yes. Did he lie when he said that all the major components for the truck were made in-house? Yes. Did he lie when he said that trucks were coming off the assembly line? Of course. Did Nikola produce a video to make it seem like the truck could be driven, when in fact it was only moving because it was rolling down a hill? Yes, that is also a real thing that this company really did.