Just a week after Nikola founder Trevor Milton was indicted, in part, for allegedly misleading investors with footage of a moving truck that was secretly rolling downhill, the hydrogen-trucking startup released footage of a newer prototype driving uphill.
The startup showed the video during a presentation of its second quarter financial results on Tuesday. (It also published the footage on YouTube.) While it may be a moral victory for the company to show its truck climbing a 12 percent grade hill in light of the more infamous clip Milton once orchestrated, the release of the footage nonetheless came alongside some bad news: Nikola now expects to deliver half the number of trucks this year than it had originally estimated. Worse, the company said global parts shortages could make it tough to even hit the new, lower target.
Nikola was the first high-profile transportation startup to merge with a special purpose acquisition company at the beginning of the SPAC boom last year. Many others have followed, including a half-dozen EV startups that also have not made or sold any production vehicles. Nikola is also not alone in drawing regulatory scrutiny, or the attention of prosecutors. The Department of Justice is investigating Lordstown Motors and the Securities and Exchange Commission is poking around a few other would-be EV manufacturers.
But Milton’s belligerence, as well as his alleged subterfuge, made Nikola a tantalising target for closer examination — including from the short-seller research firm Hindenburg Research that kicked off Milton’s downfall. That the company is still around to show that it has a truck that can go up a hill is a small miracle in its own right.
As the public spotlight shifts to other startups’ problems, Nikola now has a chance to be among the first of its peers to emerge from this period of intense SPAC merger scrutiny. It has a major reputation overhaul to execute, a parts shortage to navigate, and it’s still losing more than $100 million per quarter. Oh, and it’s also still trying to prove its basic premise that hydrogen fuel is a practical solution for long-haul trucking.
In other words: an uphill climb, though one that seems steeper than 12 per cent.