Nikola, Electric Truck Maker, Fined $125 Million for Reportedly Misleading Customers

by Michael Freeman
nikola-electric-truck-maker-fined-125-million-for-reportedly-misleading-customers

Hype and overselling are both things we’ve come to expect from most companies as customers. However, misleading investors and costing them money is another matter entirely. The electric truck maker, Nikola, is paying the price for that quite literally, with the former CEO’s comments costing them $125 million.

Nikola recently agreed to pay $125 million to the Securities and Exchange Commission (SEC) Tuesday. The money is to settle charges alleging the company misled investors. Specifically, the SEC claims the company’s founder and ex-CEO, Trevor Milton, misled investors about what its trucks could actually do, The New York Post reported. Further, the comments helped Nikola boost its stock price despite the fact it hadn’t taken anything in revenue.

The SEC released a letter detailing what transpired this morning. “Before Nikola had produced a single commercial product or had any revenues from truck or hydrogen fuel sales, Milton embarked on a public relations campaign aimed at inflating and maintaining Nikola’s stock price. Milton misled investors about, among other things, Nikola’s technological advancements, in-house production capabilities, reservation book, and financial outlook.”

Nikola mentioned the settlement last month, though it did not outright admit or deny doing anything wrong. Milton resigned from the company last year in September and faces separate charges. These include federal insecurities and wire fraud charges that came about this July, though he has pleaded not guilty.

Nonetheless, Nikola informed its investors that it seeks reimbursement from Milton for the settlement. Milton is to pay it off in $25 million installments that are due every six months. The SEC states the first payment is due within two weeks from now.

GM is Bringing Back the Hummer Name for its Own Electric Supertruck

Though Nikola’s electric truck is facing some of its own trouble, GM is looking to bring its own onto the horizon. In fact, it’s already beginning to ship its GMC Hummer EV truck to customers.

CNBC reports the new truck features Ultium motors and batteries, which GM developed in-house. The company plans to use them as a foundation for electric vehicles they develop in the future. GM also stated they invested $30 billion into the production and development of their electric vehicles.

GM hasn’t confirmed how many reservation requests it received for the Hummer EV but has stated it is fully booked through next year. Mark Reuss, GM President, did say last week the company plans to make roughly 1,2000 “Edition 1” Hummers initially. It is known the special “Edition 1” version of it will retail for $113,00. Later versions will cost less and will enter production at a later date.

The first production Hummer EV was auctioned for $2.5 million, with proceeds going to the Tunnel to Towers Foundation. The organization honors first responder Stephen Siller and all those who lost their lives on September 11.

Outsider.com