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Nikola Delays Pickup Unveiling; GM Partnership in Question
Drama intensifies with new charges against former chairman
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Nikola Badger (Image: Nikola)
Troubled electric vehicle startup Nikola has postponed the world conference that was scheduled to take place in December at the company’s Phoenix headquarters.
The much-hyped event, which was to include in-person attendees, was expected to feature the unveiling of a production version of Nikola’s all-electric Badger pickup truck and reveal new details about several of its other projects.
In its official announcement, the company cited concerns about the coronavirus and restrictions on in-person events in Arizona. Ticket holders can opt for a refund or keep them for an unspecified later date when the show is rescheduled.
Bigger Issues
The postponement was announced the same day Nikola had hoped to finalize its pending $2 billion partnership with General Motors, which agreed to build the Badger for Nikola and take an 11% stake in the company.
That didn’t happen. The companies now say they are continuing negotiations. They have until Dec. 3 to complete the deal, at which time either side can terminate it.
What Happened?
Two days after the proposed GM agreement was announced on Sept. 7, short-seller Hindenburg Research accused Nikola of fraudulent business practices and overstating claims about its technology and the development of its vehicles.
The U.S. Dept. of Justice and Securities and Exchange Commission reportedly are investigating the allegations.
The controversy forced Nikola founder and chairman Trevor Milton to resign two weeks later.
Milton, who retains 35% ownership of the company, and Nikola deny any wrongdoing.
Since the Hindenburg report, two women (including a cousin) have accused Milton of sexual misconduct about 20 years ago when they were teenagers. He has denied these charges too.
What’s Next?
In an effort to calm investors, Nikola issued a statement outlining its various business ventures.
This includes the electric Tre semi-truck, which Nikola claims will be “substantially completed” within the next few weeks and is on track to launch late next year.
In the release, the company describes itself as a "a technology disruptor and integrator" aimed at becoming a "global leader."
Nikola’s stock, which has plunged in recent months since topping out in early June, closed up nearly 15% at $20.48.
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