Electric-hydrogen truck startup Nikola is an 'intricate fraud' according to reports

Nikola isn't a new name in the automotive field. For years now, the startup promised to change the world with fuel cell- and electric-powered semi trucks, and in recent months, investors bought in as the search for the next Tesla heats up. After years of it hyping proprietary technology such as "game-changing" battery tech, cheap hydrogen fuel and more, a new report alleges that the company never had much at all.

Instead, the startup apparently used smoke-and-mirror tactics to land big-name partners from Bosch to General Motors. A bombshell Thursday report from forensic financial research firm Hindenburg Research compiled evidence that shows, at a minimum, Nikola and its founder Trevor Milton haven't been entirely forthcoming about its trucks or its powertrain systems. One thing to note before we detail the findings: Hindenburg disclosed that it's a Nikola short-seller, meaning it may profit if Nikola stock performs poorly. (On its website, Hindenburg notes that its work has prompted executive resignations and investigations that led to SEC charges.) The research firm didn't immediately respond to Roadshow's request for comment.

A Nikola spokesperson told Roadshow, "Nikola has been vetted by some of the world's most credible companies and investors. We are on a path to success and will not waver based on a report filled with misleading information attempting to manipulate our stock."

Hindenburg compiled a detailed account of Nikola's early days, predating the company itself and delving into Milton's past business doings. Hindenburg accuses Milton and the company of "intricate fraud" and supplies recorded phone conversations, text messages, emails and legal documents to back up its claims. 

A trail of proprietary technology that never existed, overinflated contract deals and exaggerations of employee experiences propelled Milton to early success, Hindenburg's evidence shows. After he established Nikola, Milton worked to over-hype or over-promise its upcoming semi truck's capabilities and passed off pieces of equipment, such as inverters, as components designed in-house.

The Nikola One, for example, was never a running truck, according to the report's evidence. Despite Milton's declarations that the truck was "not a pusher" and moved under its own power, no evidence suggests that's the case. In fact, a video used to demonstrate the truck moving at what looked like highway speeds was filmed on a downward grade with camera tricks. The semi rolled with momentum, not under its own power. Infotainment displays, which Roadshow's Emme Hall viewed in person at the One's reveal, were powered by a concealed cable. The rest of the technology was a mockup, and internals were put together using basic hardware store parts, according to the report.

Perhaps worse, the One never had a hydrogen fuel cell powertrain at all. A body shell hid natural gas turbines, according to the report's sources, which include former Nikola employees. Instead, Nikola stenciled hydrogen decals on the truck body to inflate the suggestion that a game-changing fuel cell powertrain resided underneath, according to photo evidence supplied in the report.

Indeed, the evidence pointing to Nikola lacking its own hydrogen or battery technology gives the GM partnership more legs. It's not clear what GM actually gets out of the deal, other than the ability to cash in on snazzy startup hype. Nikola, meanwhile, actually gets hardware -- batteries for its promised pickup truck and fuel cell tech for its semis. Nikola surely wouldn't need the hardware if it's developed the tech in-house over the past five years.

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