[Asia Economy Reporter Yujin Cho] The trial for fraud charges against Trevor Milton, founder of the American electric truck company Nikola, is set to begin this week at the U.S. Attorney’s Office for the Southern District of New York, the Wall Street Journal (WSJ) reported on the 11th (local time).
Previously, federal prosecutors indicted Milton, the founder and former CEO of Nikola, on securities fraud charges. Prosecutor Audrey Strauss stated, "The defendant lied about nearly every aspect of the business to increase investor demand for Nikola stock."
Milton founded Nikola in 2015 and gained attention as the "second Tesla" by unveiling plans to manufacture and sell large trucks powered by electric batteries and hydrogen fuel.
Riding on its popularity, Nikola went public on the U.S. stock market in June 2020 through a SPAC merger, and its market capitalization once surpassed that of Ford. However, following fraud allegations, its stock price plummeted to the $5 range.
Milton promoted videos on YouTube showing hydrogen-powered trucks, claiming them to be "fully functional vehicles." In reality, the trucks did not have fuel cells or hydrogen gas storage tanks installed, and videos were fabricated to make trucks rolling downhill appear as if they were moving under their own power.
Nikola’s fraud allegations first came to light when short-seller Hindenburg Research exposed them in a 2020 report. Milton stepped down as CEO following the Hindenburg Research revelations.
Nikola's hydrogen-powered Nikola Two semi-truck scheduled for sale in 2024. (Photo by Nikola Motors)
Milton claimed on Twitter that he had created a fully functional electric pickup truck prototype, but prosecutors stated that the electric pickup truck existed only as a completed sketch.
Additionally, Milton promoted that Nikola had reduced hydrogen production costs from $16 per kilogram in 2020 to below $4, but prosecutors pointed out that Nikola had never produced hydrogen at that time.
However, Milton has pleaded not guilty to the fraud charges. His defense attorney said, "Milton acted in good faith and had no intention to deceive anyone."
According to WSJ, if found guilty, Milton could face a maximum sentence of up to 25 years.
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