The Truth Behind the Lies
The Truth Behind the Lies : The Story Behind Nikola Corporation
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| The CEO of Nikola Corporation, Mark Russell, with the Founder of Nikola, Trevor Milton, standing in front of the Nikola Tre. Image Credit: AZCentral |
Trevor Milton, the name behind Nikola Corporation. In 2014, Milton had created the company with goals to find a clean source of energy for cars. Rather than hopping on to the popular wagon of electric vehicles, he branched off with hydrogen-electric vehicles. “When hydrogen combines with oxygen inside a fuel cell, its only byproducts are water and heat. This makes hydrogen the ideal energy solution for improving air quality and reducing greenhouse gas emissions” (Source : Nikola). Similarly to Tesla, Nikola would have a network of recharging stations all over the nation to allow for ease of access to needed fuel. This new clean energy idea was something different than what had been established in the EV market.
Nikola Corporation will be providing a system of production, distribution, and dispensing of the fuel under the name HYLA. HYLA would produce the hydrogen in numerous locations in the United States (West Coast, Gulf Coast, Midwest, and Mid Atlantic) and Canada (Western Canada). “Our goal is to develop the lowest carbon-intensive footprint and achieve a competitive cost position in comparison to diesel. Working with our supply partnerships, we intend to accelerate hydrogen availability” (Source : HYLA). In terms of distribution, HYLA wants to make hydrogen fuel more accessible. “By providing hydrogen transportation and logistics, working with established partners, and leveraging existing infrastructure, we can work together to develop conveniently available hydrogen fuel and transition to zero emissions” (Source : HYLA). The dispensing aspect relates to the network of fueling stations all over the nation. Nikola Corporation projected to have 60 hydrogen stations by 2026 (Source : Green Car Report). With the idea and the spokesperson ready, Nikola was ready to be presented to the world.
On May 9th of 2016, Nikola Corporation unveiled the Nikola One, the first product of the company. It was a tractor truck powered by hydrogen-electric power. This truck is able to drive 1,000 miles until it needs to be refueled. The refueling time was only 15 minutes for another 1,000 miles (Source : Cold Fusion). Though many other automotive companies started with cars as their entrances into the EV market, Nikola decided to break into the transportation (via highway/truck) market. As the EV market has been saturated with many automotive companies, Nikola chose a unique direction that had potential for growth. Within the United States, trucks are always in constant motion, transporting merchandise from one location to another. They are a part of the issue when it comes to carbon emissions. As many focus on the changes that need to happen day to day to reduce carbon emissions, Nikola took a bold step to tackle a large contributor to our environmental issues.
The Nikola One was shown to the public on December 1, 2016. A fully functional tractor truck was put on stage where Milton would show the world what Nikola Corporation had to offer. Milton had expressed numerous times that the truck was fully functional though that was later found out to be a lie. In my previous post “A Cheater in the Race to go Green”, the Hindenburg Research exposé revealed that the truck was just a shell and was powered by a cable running through the stage. However, this information was released much later. After this presentation, the public was impressed with Nikola Corporation and they were extremely excited for its future. One of the outcomes of this presentation was the deal with Bosch. Nikola Corporation would be able to “utilize fuel-cell power modules using technology licensed from Bosch” (Source : Nikola). The public reveal and the Bosch deal help solidify Nikola’s place as a legitimate threat to Tesla.
On September 8th of 2020, Nikola Corporation and General Motors formed a strategic partnership. In exchange for 11% equity of the company, General Motors is to “engineer, validate, homologate and build the Nikola Badger for both the battery electric vehicle and fuel cell electric vehicle variants as part of the in-kind services” (Source : Nikola). With this deal, Nikola goes into the automotive industry with the pickup truck, the Badger. GM was one of the companies that was behind in the EV market. They weren’t too keen on taking risks which resulted in them staying behind in the race. The partnership was a win-win for both companies. GM now has a foot in the race for electric vehicles and Nikola is seen as a legitimate competitor against Tesla, gaining the favor of the public and investors.
All was well until two days later, when the Hindenburg Research exposé was made public to the world.
The blog post provides a detailed overview of Nikola Corporation's history, including the company's focus on hydrogen-electric vehicles and the strategic partnerships it has formed over the years. I am curious to know more about the Hindenburg Research exposé and its impact on Nikola Corporation's reputation and stock prices. Also, what steps did Nikola Corporation take to address the issues raised by the exposé? How does Nikola's approach to hydrogen-electric vehicles differ from other companies in the EV market, and what are the advantages and disadvantages of this approach?
ReplyDeleteThe report as well as the SEC investigation that followed undoubtably prompted a huge drop in the stock price of more than 10 dollars. Over the next few years, the price steadily dropped as the reputation of the company was tarnished with the proceedings of the investigation and the very public stepping-down of Milton. To date, the internal fires of the corporation have not been put out. Hence, the price remains at a mere $1.17. As for Nikola's approach, what makes it unique is the fact that they utilize hydrogen fuel cell technology technology over the standard lithium-ion battery technology most EVs house today. The main advantages of this new and upcoming technology is that it provides significantly more range and refueling is much quicker as compared to a wait time standard to most EV recharging. The two main setbacks is need to establish refueling stations as well as the fact that this technology simply is not at consumer-level yet.
DeleteI wonder why this relatively small firm decided to tackle the EV market, especially with such little ground-work or an actual product. It feels like they just kept digging themselves a deeper and deeper hole. I'm wondering how GM didn't do audits and find out sooner that they were lying about the whole thing
ReplyDeleteTrevor Milton has no genuine past with alternative energy. He went to college for one semester as a marketing major and then decided to drop out. Milton had a past with companies in alternative energy. I will say that those businesses in the past were built upon similar lies like the one spoken about Nikola's advancement in technology. It wasn't good either when he hired his construction brother to be head of the production of the alternative energy. General Motors was a company behind in the race to go green. One of the last major automotive companies to finally create electric vehicle. Knowing that they were behind and needed to catapult their name to the front of the race, they took a risk with Nikola. However, they were thinking smart. They would gain if the Nikola was honest with their words which obviously didn't happen. The real result had no damaging effects of GM. Here is a video (https://www.youtube.com/watch?v=IKlZgI65gEk) that talks more about the deal with GM and how GM was smart with the parameter of the deal.
DeleteI'm curious about the relationship between Nikola and GM. Do you think they were in on the scheme to get the public to believe that they collectively created some revolutionary technology? Or, was GM just a pawn in Nikola Corporation's ploy? If that's the case, I feel like GM should be held responsibly as well, to an extent.
ReplyDeleteIn my opinion, General Motors did not have much to do with Nikola's downfall since they were more worried about their entrance into the electric vehicle market. Major automotive companies had already entered market with vehicles already on the road with Tesla being the biggest competitor. GM was falling behind so they jumped on an opportunity that would give them a foot in a race especially a race that had no contenders. Hydrogen-electric fuel had not be conquered yet. With this deal, GM pulls through as a huge winner. GM was neither a pawn. They made this deal to make sure they weren't hurt by any downfall and benefits from all the success. Here is a video (https://www.youtube.com/watch?v=IKlZgI65gEk) that expands on this matter. This is highly informative and detailed about the deal with GM and the outcomes that GM faces regardless of Nikola's future.
DeleteThis post highlights the unique approach to clean energy and its potential to disrupt the transportation. The founder and CEO, Trevor Milton curated this whole story to gain investors but it definitely takes more than one person to concoct a plan like this. I personally think GM was also in on it and therefore should take partial blame for the event.
ReplyDeleteI do disagree with you. It was Trevor Milton and Nikola Corporation that had curated the original lies to lure in investors for their initial investments. Though his ideas were truly a vision of the future, they weren't a reality. General Motors later came in to help progress the success of the technology. They weren't supplying any lies to the public nor did they say anything negative regarding the company. Yes, it can be seen as a lying to the public but they were also lied to as a company. Nikola lied to them just as they lied to the public. With new advancements in technology, there is always some kind of resistance just in case it doesn't work out. GM must of had a skeptical feeling of Nikola which leads to a deal that protects them from failure. Please take a look at this YouTube video (https://www.youtube.com/watch?v=IKlZgI65gEk) to understand GM position in all of this. This video goes in depth the deal between the two companies and how GM would results of the deal.
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