Trevor Milton makes the announcement following fraud accusations.
The founder of Nikola Motors has announced his immediate resignation as executive chairman of the company following fraud accusations. Trevor Milton made the decision to step down even though the company continues to deny the accusations made by Hindenburg Research earlier this month. It continues to threaten legal actions against the financial research firm that specializes in short-selling, aka making money by betting against companies.
"I asked the Board of Directors to let me step aside from my roles as Executive Chairman and a member of the Nikola Board of Directors," Milton tweeted. "The focus should be on the Company and its world-changing mission, not me. I intend to defend myself against false allegations leveled against me by outside detractors."
Milton is also resigning from Nikola's board.
His successor as chairman will be current board member Stephen Girsky, a former vice chairman of General Motors. Hindenburg's damning report was released only two days after Nikola and GM announced a major deal in which GM would help engineer and build the Nikola Badger battery-electric and hydrogen fuel-cell pickup truck in return for an 11 percent stake worth $2 billion. The Badger would also benefit from GM's Ultium battery technology. GM's plans remained unchanged following Hindenburg's report.
If you recall, that report claimed Nikola and Milton purposely engaged in deceptive tactics in order to manipulate public opinion of the company. One example was a video demonstration of Nikola's semi-truck "in motion." The financial firm claimed this vehicle was a non-working prototype that was rolled down a hill, thus giving a false impression it was operating under its own power.
Nikola later admitted the rolling method was used, but the vehicle did have numerous functional systems as well. Other accusations include misrepresentations about Nikola's battery technology, the capabilities of a proposed hydrogen fueling station network, and even the number of customer reservations for the Tesla Cybertruck-rivalling Badger. Since Hindenburg published its report, Nikola shares have dropped by more than 19 percent. Nikola quickly obtained outside counsel and it appears one of the lawyers' first major actions is to have Milton step aside.
Meanwhile, Nikola says it will continue to work with the Securities and Exchange Commission (SEC) regarding the report. The US Justice Department, which also has not yet launched an official investigation, is also reviewing the claims against Nikola.