Nikola founder Trevor Milton insists vehicle start is in good condition

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Trevor Milton, a self-proclaimed pioneer in hydrogen-powered transportation, has had the ups and downs of life this week as a visionary entrepreneur eager to change the world.

On Tuesday, the 38-year-old college dropout announced a $ 2 billion partnership under which General Motors would build his company’s electric pickup trucks, while supplying it with hydrogen fuel cells for its heavy, or semi-finished trucks. . Shares of Mr Milton’s start-up Nikola jumped more than 50% – though they did not return to their June high, when the company was briefly worth more than GM itself.

Yet 48 hours later, a report from Hindenburg Research called his business a “complex fraud.” The allegations included claims that Nikola had faked product demonstrations and passed off other companies’ technology as his own. The stock gave up nearly all of this week’s wins, as Mr Milton was reduced to rant in a video posted to Twitter: “The more they come to me, the stronger it makes me.”

On the day he was sandwiched between these extremes, Nikola’s founder was doing what he did best: bragging about his technology that was supposed to beat the world, surpassing his company’s accomplishments, and dismissing his many criticisms on social media. for a supposed lack of imagination.

In an interview with the Financial Times, he spoke of Nikola – whose only tangible results are two prototype hydrogen trucks – as if the Arizona-based company had already revolutionized the world of transportation. “I knew I had a chance to change the world. And that’s what I did, ”he said.

He verified his company’s supposed achievements: “We have the most advanced semi-trailer in the world, we have more technology around hydrogen refueling stations than anyone else in the world, we have 10 billion dollars in orders with our semi-truck. Add to that the “billions of dollars in orders” for the battery-electric vehicle GM will build, “the most advanced pickup the world has ever seen.”

Among those orders cited, he added: “It’s damn nearly seven years of production, sold out. It’s about as good as a business you could dream of starting.

In this relentless barrage of hype, delivered in a disarming and understated manner, reality is easy to overlook. Nikola has not yet put any vehicles into production. And, as its regulatory filings clearly show, it has no orders for its fuel cell trucks, only non-binding reserves.

As for all the technological brilliance – covering not only the fuel cells, which some of the world’s largest automakers have spent years and billions of dollars trying to perfect, but also the very complex and expensive business of creating a National network of hydrogen refueling stations, as well as supposedly revolutionary new battery technology – there is little to see. Nikola has a total of only 11 patents in the United States, with 55 more pending applications.

Steadfast, Mr Milton insists that Nikola owns the intellectual property covering “the whole core” of its vehicles and will start producing trucks next year. “If we were already in full production our stock wouldn’t be at $ 45 a share, it would probably be at a thousand.” That would value the company at around $ 370 billion – even more than Tesla, whose value has overtaken the rest of the auto industry this year.

Mr. Milton’s personal journey, from dropping out of college to pioneering fuel cells, seems as unlikely as the story he tells of Nikola. This led him through a seemingly random series of start-ups: an alarm company, an online flea market, a company that converted diesel truck engines to run on natural gas, and a gas storage company. natural. But in its own interpretation, they have all been part of a cohesive path on the path to the global transportation revolution.

His epiphany came at the age of six, he says, seeing electric trains at the Union Pacific Railroad where his father worked, led to the vision of a pure electric freight truck.

Mr. Milton was a high school dropout before he was a dropout – he says he “doesn’t learn well by studying books, I learn by hands-on experience.” A Mormon, one of his most formative experiences was on a mission in São Paulo: “It taught me not to be selfish. It taught me to care about others and build people up, not tear them down.

An unwavering self-confidence in the face of hardship might just be Mr. Milton’s most telling quality.

Nikola CEO Mark Russell, who first met the entrepreneur as a client years ago, sums it up in one word: persistence. “This is Trevor’s great strength. What he sees is what he pursues, and he sees neither the obstacles, nor the challenges, nor the failures, ”he said.

Mr Russell was so in love that he persuaded his old company to buy Mr Milton’s gas storage company, then later resigned and went to work at Nikola.

Walking a fine line between hype and reality isn’t new to tech leaders – Tesla’s Elon Musk has made it an art form. But Mr. Milton takes it to a whole new level.

Image by Nikola of a hydrogen truck © COPYRIGHT BRYAN SNIDER PHOTOGRAPHY LLC, 2020

Mr Russell, whom a Nikola employee describes as the mentor of the youngest founder, tries to laugh at his protege’s exaggerations. Comparing him to “people who have promoted great ideas in the past,” he added, “Is he doing it just like you or I could? Probably not. ”

It is less clear whether he crossed the line.

Nikola faked a video of one of his trucks making it look like the vehicle was traveling on its own when it was really only going downhill, according to Hindenburg’s report – a claim supported by the report from FT this week.

“It was built to be a working prototype,” Russell insists of the truck.

But did it really work? His response, after a long pause: “I wouldn’t comment on this.”

Asked about Mr Milton’s claim that he has all the ‘core’ technology for his vehicles, Mr Russell described the company as an ‘integrator’, bringing together the many pieces of its vehicles from a chain of complex supply. “The most important thing you can offer any market is a total solution,” he said.

GM has since said it “stands by the statements we made in announcing the relationship.”

Nikola has threatened legal action against the short seller, who is betting against the company’s stock, meaning he profits if the stock goes down.

Promising too much on the current state of consumer tech can help spark excitement among customers, says executive at rival electric truck startup, but in the die-hard trucking industry, there’s less patience for empty promises – especially when it comes to supposedly revolutionary technology like fuel cells.

“It’s hard to sell the dream and the vision, when the vision takes 20 years to build,” said this person.

Mr. Milton isn’t the type to let a little problem like this get in his way. Hours after the publication of the critical hedge fund report, he replied on video, “This will show you when you change the world. . . these people love to shoot you down.

It reminded of another lauded tech visionary who came under scrutiny for allegedly exaggerating his company’s accomplishments. “This is what happens when you work to make a difference,” Elizabeth Holmes, the founder of blood testing start-up Theranos, said after being attacked for the first time. “First they think you’re crazy, then they fight you, and then all of a sudden you change the world.

Ms Holmes now faces a fraud trial for claiming to have faked tech demonstrations, among other things. Mr Milton, on the other hand, still runs a $ 14 billion company and is committed to seeing it through.

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