Nikola, starting with a scandal. Maybe not the best way

The future of emission-free heavyweight trucking. Caught in a scandal before even starting to make revenue

Cloud Analytix
4 min readSep 28, 2020
Image from Nikola Motor Group — Badger

If you have been watching the news lately, you would most likely have heard about Nikola Corp. Nikola is a hydrogen-electric vehicle startup that went public this year through a merger with a SPAC (Special Purpose Acquisition Company).

Snapshot on Wall Street Journal

With Tesla’s share price breaking through the roof, many investors have flocked to the potential next Tesla, as it is widely believed that Tesla will not be the only big player within the electric vehicle sector.

The Business of Nikola

Snapshot on Wall Street Journal

Nikola will produce electric and hydrogen trucks. With their latest financial results stating that “In the second quarter of 2020, Nikola met predetermined milestones on our journey toward becoming the zero-emissions transportation leader in the global heavy truck market,”

Electric Vehicles (EV) will become a major thing. California recently announcing that they will ban sales on vehicles with combustion engines starting 2035. California is one of many who are planning the ban of combustion engines in the future.

Nikola wants to play in this space. Focusing on the truck and heavy truck markets. The reality, however, is that Nikola has not made a single sale yet. Their current plan is to start the production of their vehicles in Q4 2021.

Nikola will manufacture and produce its vehicles in their factories in Ulm, Germany (Start production in Q4 2021) which will be able to produce 10 000 units per year at full capacity. Nikola is also building a production facility in Coolidge, Arizona. The Arizona facility is believed to be able to produce 35 000 units per year at full capacity.

Nikola signed a purchase order with Elm for 85-megawatts of alkaline electrolyzer capacity. This will support up to five of Nikola’s hydrogen generating and dispensing stations. At Capacity, the stations will be able to produce 40 000 kg of hydrogen every day.

What we know so far

Investing in Nikola is not investing in a well-established business. It is ultimately investing in the potential of the Electric Vehicle industry and trucks specifically.

Nikola has not made a single unit or sale and is only expecting to start production in 2021. Currently, Nikola is relying on investors' cash and the redemption of public warrants to fund their operations.

With no indication of how Nikola will perform, it is difficult to speculate how they will eventually perform. And that is what it is at this point. Speculation. with the likes of Ford planning to invest $1.45 Billion into autonomous and electric vehicles. Not even discussing the likes of VW and Toyota. Nikola will face significant competition from already well established automotive brands.

Nikola however, did enter into a strategic partnership with GM motors. The partnership will give GM an 11% stake in Nikola. GM will design and manufacture the Badger truck, and Nikola will provide the electric powered engines for the truck.

The Scandal

On 10 September 2020, Hindenburg research released a 67-page report on Nikola. The report highlighted a series of irregularities and focused on allegations around the founder of Nikola. The allegations included reports stating that Nikola exaggerated the progress made on key technologies.

In the wake of this report, the founder of Nikola has resigned. With Stephen Girsky, a former Vice-Chairman of GM taking over.

The talks between Nikola and energy providers like BP that was going to include Hydrogen power at fillings stations have stalled. Losing much of the traction that Nikola was making with their strategic partnerships.

The U.S. securities regulators and the Justice Department launched an investigation into whether Nikola misled investors and on September 27, a lawsuit was filed against Nikola for potentially misleading investors.


Nikola is an idea with a lot of potential. Due to recent events, the future of Nikola is up in the air. Nikola has responded to the allegations and denies any wrongdoing in the matter. It does, however, look suspicious that the founder stepped down after the allegations were released. The tweets (response) from Nikola Corp further raised more questions than it provided answers.

The proceedings will now begin, and we will have to wait and see what will happen to Nikola. Is this the end before they started? Or will they rise on the other side stronger than before?



Cloud Analytix

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