Trevor Milton, founder and executive chairman of Nikola, resigned after an investment fund accused him of making false assertions about his company’s technology.
Less than two weeks after signing a $2 billion deal with General Motors, the founder of electric truck start-up Nikola Corp. stepped down amid a claim that he had repeatedly lied about the company’s technology.
The resignation of Trevor Milton as executive chairman, announced late Sunday, came after the investment fund Hindenburg Research published a report accusing him of making numerous false assertions about Nikola’s technology, including once producing a video in which a truck was rolled down an incline to make it look as if the company had developed a working prototype.
Hindenburg, a short-selling firm that said it was aiming to profit by betting Nikola’s share price would go down, called Nikola “an intricate fraud.” Its report appeared only days after the company and G.M. agreed to cooperate on production of battery-powered pickup trucks and hydrogen-powered heavy trucks.
In a message posed on Twitter on Sept. 11, Mr. Milton said Hindenburg’s allegations were “lies,” and noted his company had retained the law firm Kirkland & Ellis to work with the S.E.C. on Nikola’s complaints about the Hindenburg report.
“To be clear, this was not a research report and it is not accurate,” Nikola said in a statement. “This was a hit job for short sale driven by greed.”
In a lengthy written rebuttal to Hindenburg’s claims, Nikola acknowledged the truck shown in the 2017 promotional video was not moving on its own, but it said that a semi truck, called the Nikola Tre, was being produced in a joint venture with Iveco, the Italian truck maker, and said it would be available by the end of next year. Republic Services, the trash hauler, has placed an order for 2,500 electric garbage trucks, Nikola added.
Mr. Milton also posted pictures of what he said are five trucks being assembled in Ulm, Germany. “Do these look fake?” he wrote.
The new chairman, Mr. Girsky, is a former G.M., has played a critical role in Nikola’s rise to prominence. After leaving the G.M. board in 2016, he started an investment company, VectoIQ, to provide strategic and financial help to automotive technology start-ups. He also created a special purpose acquisition company, or SPAC, that owned nothing but cash and a stock listing. When VectoIQ’s SPAC merged with Nikola in June, Nikola became a publicly traded company and Mr. Girsky joined its board.
Mr. Girsky was also a catalyst for G.M.’s partnership with Nikola. In the past he has said he called on former G.M. engineers to evaluate Nikola’s technology and its business prospects while considering the SPAC merger. When he realized G.M. had developed fuel-cell and battery technology Nikola might be able to use, he put Mr. Milton and G.M.’s chief executive, Mary T. Barra, on contact with each other.
“The initial introductions were made by Steve Girsky,” Ms. Barra said in a conference call to announce the partnership.
The day-to-day running of Nikola is in the hands of Mark Russell, the chief executive, whose ties to Mr. Milton go back several years. Before joining Nikola as president last year, he was chief executive of Worthington Industries, a diverse maker of steel products like tanks for propane, hydrogen, helium and natural gas. Worthington acquired Mr. Milton’s diesel conversion company, dHybrid Systems, in 2014 and also invested in Nikola.
Before Mr. Milton’s resignation, Sam Abuelsamid, an analyst at Navigant Research who follows developments in electric vehicles, said Nikola’s idea of powering and building a network of hydrogen fueling stations had merit.
A purely battery-powered semi, something Tesla is betting on, would likely have a shorter range than trucks with hydrogen fuel-cells, and a massive battery that could take hours to recharge — down time that could prove too costly to trucking companies.
“Nikola’s vision actually makes a lot of sense,” he said. “Whether they can execute on that is entirely another story, however.”