In the late 2010s, the global automotive industry was undergoing a revolution. Electric vehicle (EV) makers like Tesla had captured the world’s imagination, and investors were eager to find the “next big thing” in clean transportation. Into this environment came Nikola Motors, a startup promising to transform trucking with hydrogen fuel-cell and battery-electric semi-trucks.
For a brief moment, Nikola seemed unstoppable. Its bold promises and charismatic founder, Trevor Milton, helped the company achieve a valuation of more than $30 billion, briefly making it more valuable than Ford Motor Company despite not having sold a single vehicle.
But in September 2020, Nikola’s credibility crumbled. A report revealed that its most famous demonstration—a video of its Nikola One semi-truck “driving” on a road—was actually staged. The truck wasn’t powered at all. It was simply rolling downhill in neutral.
This revelation set off a chain reaction of investigations, lawsuits, and regulatory scrutiny that exposed how Nikola had built its empire on hype rather than technology.
The Rise of Nikola Motors
Founded in 2014 by Trevor Milton in Salt Lake City, Utah, Nikola Motors positioned itself as a hydrogen-electric truck company.
The startup promised to revolutionize long-haul trucking by:
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Building hydrogen fuel-cell semi-trucks with ranges exceeding 500 miles.
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Creating a nationwide network of hydrogen fueling stations.
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Offering trucks through a unique leasing model that included fuel costs.
The company’s name, a nod to inventor Nikola Tesla, directly invited comparisons to Elon Musk’s Tesla Inc. Milton frequently leaned into this rivalry, portraying Nikola as Tesla’s equivalent in the trucking industry.
In December 2016, Nikola unveiled its flagship prototype, the Nikola One semi-truck. The event featured Milton claiming that the truck was “fully functional.” Investors, media, and industry partners were impressed. Nikola secured high-profile deals, including partnerships with Anheuser-Busch and Bosch.
By June 2020, Nikola went public via a SPAC (Special Purpose Acquisition Company) merger, riding the EV boom. Its valuation soared past $30 billion, and Milton became a billionaire overnight.
The Infamous Rolling Truck Stunt
Central to Nikola’s hype was a promotional video released in 2018 titled “Nikola One Electric Semi Truck in Motion.”
The video showed a sleek Nikola One truck moving smoothly along a deserted road, appearing to demonstrate a functioning, drivable prototype. The implication was clear: Nikola’s technology worked, and it was road-ready.
However, in September 2020, short-seller Hindenburg Research published a bombshell report alleging that the video was staged.
According to the report:
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The truck in the video was not powered by hydrogen fuel cells or batteries.
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Instead, Nikola had towed the truck to the top of a long hill in Utah.
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The video footage showed the truck rolling downhill in neutral gear, giving the illusion it was self-propelled.
This revelation was later confirmed by Nikola itself, which admitted that the truck was “not powered” but claimed it never said otherwise. Critics, however, noted that the company had deliberately implied otherwise to mislead investors.
The “rolling truck stunt” became a defining image of corporate deception in the EV era.
Hindenburg’s Report and Fallout
The Hindenburg Research report, released on September 10, 2020, accused Nikola of engaging in “an intricate fraud built on dozens of lies over the course of its founder Trevor Milton’s career.”
Key allegations included:
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Exaggerated Technology – Nikola misrepresented its progress on hydrogen fuel-cell and battery systems.
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False Claims About Partnerships – Milton claimed Nikola had developed game-changing technology when much of it was outsourced or nonexistent.
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Misleading Demonstrations – The “in motion” video was the centerpiece of these deceptions.
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Hydrogen Infrastructure Promises – Nikola had announced plans for a nationwide hydrogen fueling network, but had built none.
The report sent Nikola’s stock plunging more than 35% in a week.
Regulatory Investigations
The allegations prompted swift responses from regulators:
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SEC Investigation: The U.S. Securities and Exchange Commission launched an inquiry into whether Nikola had misled investors.
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DOJ Probe: The Department of Justice began investigating potential fraud.
By September 21, 2020, Trevor Milton resigned as Nikola’s executive chairman, though he continued to deny wrongdoing.
Legal Fallout
The legal fallout escalated over the next few years:
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In July 2021, the SEC formally charged Trevor Milton with securities fraud, alleging he repeatedly lied about Nikola’s technology and capabilities to boost the company’s stock price.
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In October 2022, a jury convicted Milton of three counts of fraud, finding that he misled investors through false statements about Nikola’s trucks and technology.
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In December 2023, Milton was sentenced to four years in prison and ordered to forfeit $1 billion in ill-gotten gains.
Nikola itself settled with the SEC in 2021, agreeing to pay $125 million to resolve charges of misleading investors.
Impact on Nikola Motors
The scandal devastated Nikola’s reputation and finances:
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Stock Collapse: From a high of nearly $80 per share in June 2020, Nikola’s stock plunged to below $3 per share by 2022.
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Partnership Losses: General Motors, which had announced a major partnership with Nikola in September 2020, scaled back its deal after the scandal.
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Credibility Crisis: Nikola became a cautionary tale in the EV sector, with its name synonymous with overhyped promises.
Despite attempts at restructuring and focusing on battery-electric trucks, Nikola has struggled to regain credibility and financial stability.
Comparison with Other Corporate Frauds
The Nikola scandal is often compared with other corporate frauds:
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Theranos: Like Elizabeth Holmes, Trevor Milton made bold claims about technology that didn’t exist.
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Enron: Both used showmanship and misleading demonstrations to prop up investor confidence.
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Luckin Coffee: Both involved young companies exposed for exaggerating growth and capability.
What set Nikola apart was the visual simplicity of its fraud: a truck rolling downhill became the perfect metaphor for a company built on momentum, not substance.
Broader Implications for SPACs and EV Startups
Nikola’s rise and fall occurred during a boom in SPAC mergers for EV startups. The scandal highlighted:
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Risks of Hype-Driven Markets – Investors poured billions into startups without proven technology.
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Need for Due Diligence – The ease with which Nikola raised money exposed weaknesses in oversight.
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Regulatory Scrutiny of SPACs – After Nikola, regulators increased scrutiny of SPAC disclosures and investor protections.
Other EV startups that went public via SPACs, such as Lordstown Motors and Canoo, faced similar scrutiny for unproven claims.
Key Lessons from Nikola’s Rolling Truck Stunt
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Transparency Matters
Misleading demonstrations may boost short-term hype but destroy long-term credibility. -
Charismatic Founders Can Be Dangerous
Trevor Milton’s showmanship masked the company’s lack of substance. -
Investors Must Demand Proof
Nikola showed how investor enthusiasm for disruptive narratives can blind them to red flags. -
Regulatory Oversight is Essential
Stronger scrutiny of pre-revenue companies is critical to prevent hype-driven fraud.
Conclusion
The Nikola Motors rolling truck stunt was one of the most symbolic corporate deceptions of the 21st century. A startup that promised to revolutionize trucking instead staged a video of a non-functional truck rolling downhill, duping investors into believing in technology that didn’t exist.
Trevor Milton’s downfall and Nikola’s collapse became a case study in the dangers of hype-driven markets, particularly during the SPAC boom. While Nikola continues to operate, its reputation remains tarnished, and its story serves as a cautionary tale for investors chasing the next big thing in disruptive industries.
Ultimately, the Nikola scandal reminds us that in business, momentum without substance eventually runs out of road.
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