Is Nikola Motors a Scam? Have We Been Duped?

by Giovanni
Nikola Badger Electric Pickup Truck

With their recent IPO, Nikola Motors has been making controversial headlines almost daily. A company with no product, no proven technology, and no real path towards a mass scale is currently valued around the same as legacy automakers. The question of whether or not this company is to be taken seriously has come up significantly throughout the last couple of weeks. Just last month, nearly no one had heard of Nikola Motors.

This article is being updated with more information about Nikola as it happens, scroll to the bottom of the page to see any new updates

Hydrogen Fuel Cell

The company focuses in Hydrogen Fuel Cell vehicles, which is controversial on its own. With current standards, it is less efficient than today’s battery electric vehicles. It requires significant infrastructure developments as unlike electric cars, fuel cell vehicles need to be filled up at a safe facility, think gas station but more complex. As of today, hydrogen’s only benefit includes a faster fill up time, but sadly, there’s no where to fill up. According to the Department of Energy, there are 49 hydrogen fueling stations in North America, with almost all of them within California.

Fueling spots are a hurdle every new alternative energy vehicle has to combat. In their early days, Tesla faced similar issues. Even though the majority of EV owners are able to charge their vehicles from the comfort of their own home, many wanted to travel. The successful EV automaker quickly placed SuperChargers across the globe making long distant travel a breeze for anyone who chose to do so. Today they have 1,971 Supercharger Stations with 17,467 Superchargers stretching across the world.

Nikola Motor of course understands the importance of infrastructure and have thought ahead. The company plans to build up 700 hydrogen/electric stations throughout the country by the year 2028.

The company has ample amount of money with ~$750 million in cash on hand. According to some, the cost to build a single hydrogen fueling station is $1 million – $2 million. As a side note, the cost to build a Tesla Supercharger is ~$250,000, and isn’t an essential (as you can charge an electric car at home). Keep in mind, this is just costs associated with infrastructure, not actually developing tech required or you know, a vehicle.

Nikola’s Vehicles

The company has cast a wide net with seven vehicles planned for production. Originating as a semi truck manufacturer, the Nikola One was introduced. Alongside it, the Nikola Two was unveiled. The only confirmed difference known today would be the fact that the One offers a sleeping compartment.

Later, the Nikola Tre was introduced for European markets. CNH Industrial took a $250 million stake in Nikola in order to build the Tre in a 50/50 partnership under their sub brand IVECO. Using their factory in Ulm, Germany, the Tre will begin production in early 2021 with deliveries beginning that same year. The Nikola Tre is said to be offered in both a hydrogen and fully electric version, with the former being offered in 2023. Both will be offered in 4×2 and 6×2 variants with modular and scalable batteries with a capacity of up to 720 kWh, fitting all trucking needs. It’s no question as to why people are drawing comparisons between Nikola’s Semi’s and the Tesla Semi.

If this sounds like Nikola’s closet chance of success, you should know that they have close to no part in its story. Supplies will be sourced by IVECO, the truck will be produced by IVECO, and it will be built using IVECO’s readily available S-WAY platform. It does however integrates Nikola’s “truck technology”, controls, and infotainment system.

The company has shared renders of three other hydrogen powered vehicles. Two ATV’s, the NZT and Reckless share the same specs of 775 ft lbs torque, 590 horsepower, up to 150 miles of range, and a 0-60 of 4.0 seconds. The third vehicle is a jet ski… with no stated specs apart from the fact that it’s water proof with an ip68 rating…

The latest render revealed is by far a fan favorite, an electric pickup truck dubbed the Badger. It will be made available as both a fuel cell and battery electric vehicle. The fuel cell variant will have the option to run on full battery power if filling up on hydrogen isn’t an option for you. Combined, the Nikola Badger will have a range of 600 miles, 300 on fuel cell and 300 on electric. The Badger will also offer over 906 horsepower, 980 ft lbs torque, and a 0-60 of 2.9 seconds.


In order to build the original two hydrogen semis, Nikola Motors acquired a 389-acre parcel in Coolidge, Arizona, for $23 million. As of today, no construction has begun. There are however plans to break ground on July 23rd, according to the CEO. They initially stated the factory would begin producing trucks in 2021, and be able to build 35,000–50,000 trucks per year by 2023.

Logistically speaking, this is easily achievable, given enough money. We’ve seen Tesla accomplish similar feats time and time again. But the fact remains the same. As of today, Nikola Motors has not even begun construction of their factory.

The Tre is being made in IVECO’s Germany factory. There they plan to begin production of their fully electric semi-truck in 2021 with the hydrogen powered variant following in 2023.

As of yet, none of these other vehicles have a location set for production. Alongside the announcement, it was revealed that the Nikola Badger would be made by partnering with another company. Most likely in the same fashion as the Nikola Tre. This was recently reinforced by the Chief Executive on twitter. The only issue is we have yet to hear which company will partner with them or to what extent annual production numbers are expected to look like. If I had to guess, not even Nikola knows.

While currently the most talked about aspect of the company, the Nikola Badger was nearly a last minute decision. Trevor Milton recently revealed that the idea to create the Badger was only formed after seeing how ugly the Tesla Cybertruck looked, which was only revealed three months prior to the Badgers announcement.

In a company first, paid reservations will open on June 29th for the Nikola Badger. The company will hold their annual Nikola World Event on December 3rd – 5th where they will showcase a prototype of the Badger. In order to boost numbers, any reservation holders will be invited.

Is Nikola Motors a Scam?

Many argue that one day Fuel Cell could out perform electric vehicles on an emissions standpoint. However, Nikola has shown no technological advancements regarding hydrogen fuel cell. In fact, according to Bloomberg, Nikola Motors revealed their vehicles in an undrivable state without any Fuel Cell embedded. Nikola’s Chief Executive and Founder did not deny the statement rather filed suit against Bloomberg and their journalist stating that he did not mislead the public and answered all questions asked honestly.

According to Trevor Milton, currently, Nikola does have prototypes running on hydrogen power. Other than that, no questions regarding the technology have been answered.

All of these vehicles are still in their prototype stages with reservations opened. Apart from the Badger, none of them require any money down to reserve leading many to believe the company is just creating a hype to increase theoretical future sales and lead investors in.

So is Nikola Motors a scam? maybe not necessarily a scam per se, but we’ve seen this time and time again with companies creating renders, over promising, and then never being able to deliver. It’s the doom of kickstarters. Except now on a much larger scale. The trick? Gather as much attention as possible.

Alongside the announcement of the Nikola Badger, it was revealed the company would be partnering with a reality TV star for the project. While nothing is confirmed it is presumed this partnership would entail a reality TV appearance only reinforcing Nikola’s obvious need for the limelight.

Heavy D, a reality TV star from the “Diesel Brothers,” has partnered with Nikola to design, build and test the Badger in real world environments, which is anticipated to attract millions of viewers and followers through the process. The partnership will follow the Badger build from concept through production.

“My audience, hard-core truck enthusiasts, has expected me to push the limits of truck power and capabilities since my beginnings,” said Heavy D, AKA Dave Sparks. “Being able to pull back the curtain of a production truck build is a rare opportunity where we can include the everyday truck owner to participate in the final outcome of design, exterior choices and performance specs. I wanted to be part of that story and now I have the opportunity with Nikola.”

With Tesla’s exponential success they’ve clearly shown market potential for EV’s. Even if electrification doesn’t take off and one day account for 90-100% of the cars on the road, the market today is significant with everyone wanting a piece of the pie. Legacy automakers are all entering the field but behind them are these newly formed companies looking to monetize the hype surrounding alternative energy sources. If Nikola Motors wasn’t hydrogen based it would be no where near their present 25 billion dollar evaluation.

These newly formed companies are collecting millions in deposits they claim to be fully refundable. But who refunds consumers when the company goes bankrupt?

Faraday Future, Lucid, Sono, Bollinger, Fisker, the list goes on. All of these companies are looking to enter the market but to date have nothing more than a few renders and a prototype. Take a look at companies like Triton EV or Atlis who state entirely unrealistic specs while collecting ludicrously large deposits and you start to question the legitimacy of them all.

Most of these companies sincerely want to bring their prototypes to fruition and in this day and age, that’s only achievable through building a following. One that’s created by giving people what they want: controversy, out of this world specs, present-day unachievable innovation, and cool looking renders. Nikola Motors follows the same path as them all.

Tech as a whole tends to surround itself with unnecessary hype. Take a look CES as an example, the largest annually held consumer electronics show. How many of those new-age kitchen appliances shown have replaced the microwave? It’s fun to take notice and dream of this revolutionary tech-based future but not all new paths lead to success. One could argue Tesla has proven electric vehicles as a future household essential, but the same can’t be said for hydrogen technology.

Nikola could very well one day begin producing and selling hydrogen-powered trucks. They could potentially hit their annual semi-truck output goal of 35,000-50,000 and even have small success with the Badger. Even the recreational vehicles could be a hit in their respective niches. However, this is all years and years away. Nikola Motors is still a relatively new company formed just 5 years ago. They have much to do in preparation with many years left on the countdown to success. While you might not want to hear it, this is not the next Tesla and their current valuation is preposterous. I’m doubtful Nikola is a scam but they’re certainly over-optimistic and overselling both themselves and their future.


A lot has happened since we last updated this article, let’s recount them quickly.

Factory Groundbreaking

Firstly, the company had its groundbreaking ceremony on July 23rd for their upcoming factory located in Coolidge, Arizona. Unfortunately, even though there were some (what appeared to be) prop construction gear around the site, construction of the facility did not begin, even though Trevor stated that it started “today”.

Maybe he has a different definition of what construction entails, but most people would take that to mean that actual building materials have started to be placed on the site. Days and weeks after the ceremony, people started driving out to the site to see if construction had indeed begun, but it didn’t.
As it turns out, while Nikola had submitted their masterplan for the factory to the city council, it was not approved until September 9th, over two months after construction should have begun.

Trevor would probably say that how long the approval took was ‘out of his hands’ but it doesn’t change the fact the Trevor made it appear like the construction of the site would start sooner than it actually would, especially when people are making comparisons to Tesla and the work that is being put in their Texas Gigafactory construction which was announced around the same time.

Badger Parts

Moving on, we had our first look at the Nikola Badger through various pictures of parts around the car.

The image pack included a seat back, a quarter panel, tail light, part of the headlight, and various other small interior fittings that look to be 3D printed. While most people would probably like to see at least a full body prototype or perhaps a more substantial piece of the electric truck, we can see that at least something is being made.

OEM Announcement

Next came the highly anticipated OEM announcement that Trevor had been holding over everyone’s heads for months now. Early in September Nikola revealed that General Motors would be their partner in creating the Nikola Badger truck. At first, it looks really great, one of the most well-known auto brands in the world electing to work with you can really legitimize what you have been doing, but upon further examination, it doesn’t look seem to be all roses and sunshine.

Typically in these sorts of deals, the interested party puts up some sort of investment towards the company of interest, to not only give them an influx of cash to be able to continue what they are doing, but also as a sign of commitment from the company. You can look at both Amazon and Ford investing in Rivian as an example. But that was not the case here.

GM did not have to put up any investment in Nikola and was instead given an 11% equity stake in the company, worth $2 billion, as well as one seat on the Nikola board. And even on top of that GM will still get supply contracts from Nikola to build the trucks as well, which all in total is expected to bring them $4 billion of benefits while Nikola “anticipates saving over $4 billion in battery and powertrain costs over 10 years and over $1 billion in engineering and validation costs”. So one sees this not as a partnership, but instead one large payment being made to GM who has not taken on much risk and will now be able to claim that they are doing things to help with electrification.

Another interesting part of the contract is that Nikola will be moving forward with using GM’s Ultium battery system and Hydrotec fuel cell technology. Nikola, who has claimed to have some of the best technology in the world, will apparently not even be using it.

Here is Trevor going on about how advanced his old battery tech is and to just imagine how good his current technology is, well I guess we won’t find out. Trevor states that they are moving forward with GM’s technology because it ends up being cheaper than what they had, but if it was really that much more advanced than what everyone else had, it might have been worth the extra cost.

So what exactly does Nikola provide anymore if not the most important part of any vehicle? Trevor answers with:

At this point, it looks like Nikola is nothing more than a design and software firm masquerading as a car company.

Hindenburg Report

Lastly, and what currently has Trevor Milton in a bit of a frenzy is a report that was recently put out by Hindenburg Research. Before I move forward it is important to note that, Hindenburg Research is short Nikola, meaning that it is in their financial benefit if the company’s stock price drops. So do keep that in mind if you read through the report, it looks like a lot of research was put into the company, but they will paint as bad of an image as they can with the information presented, and there was a lot of information present.

I won’t go the whole summery as there are a lot of points touched upon that range from Nikola never really presenting a working vehicle to Trevor appointing his brother to be the Director of Hydrogen/Infrastructure with his only previous work experience being paving driveways. I won’t say anymore, but its quite a read.

The report ends with 53 different questions that are directed to Trevor for him to respond to all the accusations that were made. Unsurprisingly, Trevor was not a big fan of this report and as of the writing of this update, has not given a response to the questions and accusations.

Unfortunately, we do not know if we will ever get to see a response from Trevor regarding this report as he has recently stated that he will not release his responses at the advice of his legal counsel.

Trevor did however did put out pictures of the Nikola Tre being built in Germany to try to prove that the semis exist

Update 2

On September 14th, Nikola and Trevor released a response to the allegations made by Hindenburg, that well, didn’t really help much. Instead of going through the questions laid out plainly in front of them that were allegedly flat-out lies, Nikola had picked little pieces here and there to discuss. The worst part is, they didn’t even deny one of the largest accusations made, which was that the Nikola One they showed was actually unable to move under its own power. As with anything having to do with legal discourse, it all comes down to careful semantics. Here is how Nikola justified their actions:

In the report, Hindenburg claimed that the Nikola One was in fact a pusher. Nikola responds to this with “A pusher means a vehicle that was not designed to be moved by its own propulsion system. The Nikola One was, in fact, designed to be powered and driven by its own propulsion.” So you see folks, it is okay for it to not be able to move under its own power (despite having a “functional” gearbox, inverters, batteries, steering, suspension, etc.) because it was actually intended to one day work. Oh and in case you were wondering, they did in fact not deny that the Nikola One was coasting on the road in their promo video. They write:

Nikola never stated its truck was driving under its own propulsion in the video, although the truck was designed to do just that (as described in previous point). The truck was showcased and filmed by a third party for a commercial. Nikola described this third-party video on the Company’s social media as “In Motion.” It was never described as “under its own propulsion” or “powertrain driven.” Nikola investors who invested during this period, in which the Company was privately held, knew the technical capability of the Nikola One at the time of their investment. This three-year-old video of a Nikola prototype is irrelevant except for the fact that the short seller is trying to use it for its main thesis.

So you see, they just said that it was “in motion”, why would you ever possibly assume that a vehicle being shown driving down the road is actually doing so under its own power? Why would you assume that a company that is constantly touting how advanced everything they touch would actually have shown a working hydrogen fuel cell semi-truck? Wild. Why would you think that? My condolences go out to the legal firm that has to deal with this mess.

As you can imagine Hindenburg made a response countering every one of the points Nikola brought up and once again reiterated all the questions that were left unanswered. I once again will inform you that it is in Hindenburg’s financial interest for the Nikola stock to go down so they will paint things in the worst light possible, but the picture has been black for a while at this point.

Update 3

On September 21st, Trevor Milton announced that he would be stepping down from his role as Executive Chairman and give up his seat on the Board of Directors.

While Trevor Milton has attracted a lot of negative attention towards himself and Nikola, he also was able to hype this unknown company into everyone’s minds over the past few months. With there hopefully being fewer distractions for the company, we will now be able to see what the company can deliver.

Update 4

Since the departure of Trevor Milton, Nikola has been a much quieter company and more reasonable in its expectations. The Nikola Badger has been sidelined in favor of their core business of Semi trucks. Their initial deal with GM did not go through and instead transformed into a not yet finalized agreement to use GM’s batteries and hydrogen fuel cell system. Nikola is no longer the hype train that it once was, but maybe that’s for the better.

Still, the company is dealing with the ramifications of those few months where expectations were astronomical and perhaps not the most truthful. The Hindenberg piece has certainly left a blow for the company which is in the midst of multiple lawsuits and is still under investigation by the Staff of the Division of Enforcement and the SDNY. In their Q4 earnings report (page 103), they gave us an update on the investigation and surprisingly admitted to some of the points that were brought up by Hindenberg and others.

The statements that “were inaccurate in whole or in part, when made” include:

  1. in July 2016, the Company stated that it owned rights to natural gas wells, and in August 2016 that the wells were used as a backup to solar hydrogen production;
  2. in August 2016, Milton and the Company stated that the Company had engineered a zero emissions truck;
  3. in December 2016, Milton stated that the Nikola One was a fully functioning vehicle;
  4. that an October 2017 video released by the Company gave the impression the Nikola One was driven;
  5. in April 2019, Milton stated that solar panels on the roof of the Company’s headquarters produce approximately 18 megawatts of energy per day;
  6. in December 2019 and July 2020, Milton stated that the Company “can produce” over 1,000 kg of hydrogen at the Company’s demo stations and that the Company was “down below” $3/kg at that time;
  7. in July 2020, Milton stated that “all major components are done in house”; he made similar statements in June 2020;
  8. in July 2020, Milton stated that the inverter software was the most advanced in the world and that other OEMs had asked to use it; and
  9. in July 2020, Milton stated that five trucks were “coming off the assembly line” in Ulm, Germany.

This list of course isn’t an admission of all the allegations brought up, and the report later goes on to talk about how their independent investigators believe that the company does have adequate experienced workers and technologies and doesn’t qualify as something that is fraudulent. Still, some of the admissions were about one of the biggest allegations, and that was the authenticity of the Nikola One and if it worked or not. Another big one has to do with Milton’s statements regarding that the parts were all in-house. You will notice that of the nine points given, over half of them have to do with specifically Milton’s statements, rather than the company’s.

Even with this news thought it looks like Nikola has is committed to trucking along, and its stock price hasn’t suffered too much from this news. Those that have been against the company have probably moved on and those that still like it probably consider it no longer to be the same company that helped fuel the SPAC and EV stock craze of last year.

Investigations and lawsuits are still happening so we will have to wait and see where this one goes.

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