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The Episode with the Electric Truck Fraud Scandal

As the new technology hype machine works in overdrive, it’s time to take a deep breath and concentrate on product releases that we can experience for ourselves and drive. Remember those?

Chris Brown
Chris BrownAssociate Publisher
Read Chris's Posts
September 15, 2020
The Episode with the Electric Truck Fraud Scandal

The scandal, based on a report by short-seller Hindenburg Research, dropped just after the Nikola-General Motors partnership announcement.

Screen grab via YouTube.

4 min to read


Perhaps we’ll look back at last week’s Nikola fiasco as a Friends episode, “The One with the Electric Truck Fraud Scandal.” Maybe it’ll just be a blip on the radar in the trajectory of a company that went public and soon after its stock sailed so high it almost touched the sun, though they hadn’t yet sold a truck. Tesla was always cheap by comparison. 

Or it could be the end of Nikola. At this point, no one knows. 

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The scandal, based on a report by short-seller Hindenburg Research, dropped just after the Nikola-General Motors partnership announcement. Oh, that’s cruel — let the partnership announcement go public and then release the report? Short-seller shenanigans? 

Looking back, the timing of the GM-Nikola press conference was suspicious. Our team got the notice last Monday morning at 7:30 am EDT for an event starting at 9 am EDT that same day. Was that hour-and-a-half window just bad p.r., or was it designed to mitigate any questions on the pending report that both parties knew was coming? 

This will take some time to unravel, but we can look to an SEC investigation into whether Nikola may have violated securities laws. Of course, it depends on how in-depth the SEC decides to go.

And right now, we can parse Nikola’s response to the Hindenburg report. Nikola came out swinging — though the phrase “lawyered up” comes to mind. 

Here’s the Friends episode that really bothers me: “The One about that Big Truck in the Desert Video.” Nikola says that video was made for a commercial (for Phillips). You can see the commercial here. But that’s not the video in question. Sure, the footage was shot for the Phillips commercial, but this completely separate video — cleverly called “Nikola One Electric Semi Truck in Motion” — simply shows that semi moving down a desert road. 

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Yes, the truck was clearly “in motion.” But is there anyone who has watched that video that does not assume the truck is moving from its own generated propulsion? 

In its rebuttal, Nikola twists out of it thusly: “Nikola never stated its truck was driving under its own propulsion in the video, although the truck was designed to do just that … .”

And then Nikola goes on to state: “Nikola investors who invested during this period, in which the Company was privately held, knew the technical capability of the Nikola One at the time of their investment.” Sure. But did they know the video was a lie? 

Today, Hindenburg Research posted a response to Nikola’s rebuttal, which raises some of the same questions. But it bears repeating — don’t try to tell me that what my eyes are seeing can be easily brushed aside. 

Excuse me if I sound ornery. I’ve been burned before. I posted this headline in February, 2012: CODA Hopes to Launch All-Electric Sedan Next Month. (Check out that rattle trap with the surfboard on top.) A year later, CODA was pushing daisies, but only after a few years of berating journalists that their ever-extended timelines to release the car would be met. At least CODA had an actual car to display and drive around the block. 

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Note to journalistic self, based on an email in my inbox on a completely separate matter: Don’t fall for publishing sketched renderings of a start-up’s electric pickup, passenger bus, and semi, particularly when the company sending the sketches has millions of dollars of liens from contractors on a 58-acre property in West Hartford, Conn. that it bought to great fanfare, but abandoned. 

Not this time. 

The thing with the proclamations of public companies, particularly in automotive, they’ll get a nice stock bump on a speculative announcement, but when the release date passes without a product, the stock doesn’t necessarily take a hit. It will eventually, of course. But everyone, including investors, takes the phrase “within two years” with a grain of salt. 

In its rebuttal, Nikola laid down its milestones. We applaud Nikola for doing that. And we’ll hold Nikola to the timeline. 

We’re hopeful of technology that promises to change the future. Yet the hype machine in the race to electrification has been working in overdrive. It’s time to take a deep breath and concentrate on product releases that are closer to production, ones that we can soon experience for ourselves and drive. Remember those? 

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