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The founder of a new force was ordered to pay compensation!

2024-03-04 Update From: AutoBeta autobeta NAV: AutoBeta > News >


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Compared with Tesla, who is now like a fish in water in the new energy car market, Nikola, which is known as "Tesla" in the car industry, appears somewhat lonely.

Nikola, the US electric car company, said in a regulatory filing that its founder, Trevor Milton, had been ordered to pay about $165 million in compensation to the company, according to media reports.


Nikola also intends to claim legal fees from its founders, the company said in a statement. Nikola said an arbitration panel in New York ruled last week that it should receive the money from its founders to cover "costs and losses arising from government and regulatory investigations, including the company's settlement with the Securities and Exchange Commission (SEC) in December 2021 and related civil penalties".

Or affected by the news, Nikola shares rose about 9% to more than $1 a share at the close of trading on Oct. 24, with a market capitalization of about $375 million. As of Oct. 27, Nikola had a market capitalization of $1.015 billion.


It is understood that in December 2021, the Securities and Exchange Commission (SEC) announced that Nikola agreed to pay $125 million to resolve allegations that the company misled investors in terms of products, technical capabilities and business prospects, thus defrauding investors. In addition, as part of the solution, Nikola will pay $125 million in civil fines in five installments over two years.

According to the data, Trevor Milton was born in a small town in southern Utah in 1982 and graduated from the University of Pennsylvania. Unlike Musk, who has a double degree in physics and economics, Trevor Milton only has a high school degree and drops out of Utah Valley University after only one semester. In 2004, Trevor Milton founded its first company, selling home safety systems, which were later sold for $300000. In 2009, Trevor Milton and Mike Shrout co-founded dHybird, a company that converts diesel trucks into hybrid trucks, and this is the first time Trevor Milton has been associated with new energy trucks.


In 2010, Trevor Milton turned to Swift, a transportation company, and dHybird and Swift worked together to sign an investment agreement worth $2 million. Under the agreement, Swift asked dHyird to refit and test 10 trucks and 800 trucks later, but progress was not smooth. In 2012, Swift sued dHyird because dHybird delivered only five trucks, the truck performance did not meet the original promise, and $2 million was embezzled by dHybird. In the same year, Trevor Milton shut down dHybird and founded dHybird Systems. Unfortunately, dHybird Systems was eventually acquired for $15.9 million in 2014.

After several companies, Trevor Milton's fate didn't change until it founded Nikola in 2015, and then it even became CEO, an electric car company with a market capitalization of $34 billion. Unfortunately, the highlight was also brief, when Trevor Milton resigned on Sept. 20, 2020, after being accused of shorting.


In 2015, the 33-year-old Trevor Milton founded Nikola, known as the "Tesla" of the car industry, because the name was inspired by Tesla, and Nikola and Tesla together happen to be the name of American inventor Nicholas Tesla. Unlike Tesla, Nikola did not choose the lithium battery power route at the beginning of its establishment, but mainly developed new energy heavy trucks powered by hydrogen fuel cells and batteries. Of course, Nikola is having a hard time compared with Tesla. Nikola was unable to sell a truck when it went public at $3.3 billion in 2020, which is why Nikola was labeled "PPT car."


In 2016, Nikola launched its first hydrogen truck product, the Nikola One, which is mainly powered by a set of fuel cells. On the day of the new car launch, Trevor Milton said that Nikola One was "the most advanced semi-trailer truck in the world so far" and that Nikola had been ahead of other car companies in technology for 10-15 years, during which Haikou boasted that it had overtaken Daimler, Volvo and other mainstream truck companies within 1-2 years. With Trevor Milton's comments, in the following years, Nikola successfully attracted commercial vehicle company WABCO, hydrogen energy equipment manufacturer Nel, photovoltaic manufacturer Hanwha and so on. These global giants not only reached strategic cooperation with Nikola, jointly carried out technology research and development, but also participated in financing.


In February 2020, Nikola launched a new product, the Nikola Badge electric pickup truck, which is equipped with an additional battery pack in addition to the hydrogen fuel cell, bringing the vehicle a range of nearly 1000 kilometers. After the launch, it will directly match the standard Tesla CyberTruck. At that time, public data showed that Nikola had received orders for more than 14000 trucks by 2020, with potential sales of more than $10 billion. In this context, in June of the same year, Nikola successfully listed on NASDAQ through backdoor. At the end of the day, Trevor Milton was worth as much as $8.1 billion, becoming the first person in the world in the field of hydrogen fuel. Three days after listing, Nikola's share price doubled, with a market capitalization of up to $34 billion, surpassing Ford, a century-old car company, and Nikola was once regarded by the industry as "Tesla's strongest competitor."


On September 8, 2020, Nikola ushered in another highlight moment. General Motors of the United States announced that it has reached a strategic partnership with Nikola to acquire $2 billion of newly issued common shares in Nikola with equivalent non-cash assets. GM will own 11% of Nikola and can nominate a board member. Surprisingly, only the next day, a short report exposed Nikola's scam.

On Sept. 9, 2020, short seller Hindenburg Research (Hindenburg Research) released a 20, 000-word explosive short report against Nikola and its founder, accusing founder Trevor Milton of lying to investors and that Nikola does not have its own patented technology. On the 12th of the same month, Trevor Milton was charged with four counts of fraud. Eventually, Nikola pleaded guilty to the charges, and Trevor Milton resigned on September 20, 2020.


By October 2020, Nikola's share price had plummeted 50%, and the Securities and Exchange Commission, Postermaster General and the Ministry of Justice also began to investigate Nikola, and GM abandoned its plan to buy shares at the end of November. It is worth mentioning that after founder Trevor Milton left, Nikola miraculously built a mass-production car.

By June 17, it was reported that Nikola would cut 270 jobs, or about 23 per cent of its workforce, and limit its electric truck business to North America to seek to retain cash. The company then said it would lay off 150 employees of its European project and 120 employees at its plants in Phoenix, Arizona and Coolidge. At the time, Nikola said the job cuts were expected to reduce personnel-related cash spending by more than $50 million a year; by 2024, the company's annual cash expenditure was expected to fall below $400m.


On Aug. 4, Nikola announced a personnel reshuffle. Michael Lohscheller, the company's chief executive, decided to resign because of family health problems. Stephen Girsky, a former GM vice chairman, will take over from Nikola CEO. Girsky, who is currently chairman of Nikola, will become the company's fourth CEO. Then, on Aug. 11, Nikola issued a statement announcing a voluntary recall of all electric trucks delivered so far and that sales would be suspended.


According to the latest results, Nikola posted revenue of $26.04 million in the first half of 2023, compared with $20.02 million in the same period, and a net loss of $387 million, compared with a net loss of $326 million a year earlier. It is understood that Nikola will release its third-quarter earnings report before the opening of the US stock market on November 2.

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