The Nikola One was inoperable when it was unveiled at an event in 2016, according to a report by Bloomberg. During the event, the company's founder Trevor Milton made comments suggesting to the audience that the hydrogen-powered truck they were looking at was already driveable. The report states that on the contrary, the truck was actually pushed onto the stage because... it didn't have a motor or gears inside.
Milton conceded to Bloomberg that the motor and gears were removed before the event but says it was for safety reasons. During the unveiling, however, he said, "This thing fully functions and works." Later on, Milton added that the truck was not "a pusher," a term referring to an inoperable prototype that needs to be pushed onto the stage.
Milton is now threatening to sue Bloomberg over the story, channeling Tesla CEO Elon Musk's tactic to try and discredit the media.
Still a vaporware company — Nikola was founded in 2014 and has yet to produce or sell any vehicles whatsoever. Other automotive upstarts like Faraday Future have come and gone without getting a vehicle to production. In that sense, some puffery isn't significant. It's pretty common in this space to hear a lot of exaggeration as other companies emulate the strategies of Tesla in hopes of ginning up the same hype and investor interest. Nikola hopes to do to the trucking industry what Tesla has done to small passenger vehicles. It even takes pre-orders for its vehicles like Tesla long before it's ready to produce the cars.
The reason why Milton's comments are coming under particular scrutiny now is that Nikola has suddenly become a publicly-traded stock worth $22 billion, thanks to investor demand for worthless stocks to gamble on (Hertz began trading again recently even though it's insolvent). The company is liable for damages if it knowingly deceives investors by making inaccurate comments that lead investors to plow more money in, like that its car is able to drive when it really isn't. Public companies have much less wiggle room with regards to their public comments.
Great, another Tesla — Tesla and Musk have a long history of playing fast-and-loose with the truth. That company has faced lawsuits in the past for Musk's lie that Tesla had a buyout offer that led to a run-up in the stock price, and for its acquisition of SolarCity, which investors claimed Tesla knowingly overpaid for in order to bail out Musk's cousins who started the solar company. Musk eventually settled with the SEC over his buyout comments and Tesla paid investors $60 million over the SolarCity acquisition.
Nikola may well get its truck out the door — it expects to begin sales in 2021 — but it's not okay to lie as a public company when your comments can lead to wild fluctuations in the stock price that risk harming investors financially. Nikola's shares have gone up and down as much as 20 percent on some days since it went public on June 4th. The day it announced pre-orders for its Badger pickup truck, shares more than doubled. But if another untruth is revealed the stock price could plummet by the same amount, hurting those who bought in on the climb.
Maybe Milton has been inspired by the way in which Musk is able to continuously lie to gin up support and mostly get away with it.