(Bloomberg) — Trevor Milton was riding high a little over two years ago. His battery-electric and fuel cell-powered truck startup, Nikola Corp., had just gone public by merging with a special purpose acquisition company, and its shares were among the first post-SPAC meme stocks to go berserk. Without having sold a single truck, Nikola briefly exceeded Ford Motor Co. in market value.
People familiar with the company’s first prototype, the Nikola One, told Bloomberg News that at the unveiling of the truck in December 2016, the founder of the company exaggerated its capabilities. And on June 17, 2020, Milton gave a pivotal interview.
Milton acknowledged during the interview that the truck he showed the crowd at the unveiling years earlier — which he described as “not a pusher,” meaning an inoperable vehicle meant just for show — lacked key components to run under its own power, including a fuel cell or functioning electric motor. While the words H2 Zero Emission Hydrogen Electric were emblazoned on the vehicle and Milton referred to the truck as fully functioning, he said 3½ years later that he hadn’t deceived anyone.
Bloomberg’s story published that afternoon got the attention of Hindenburg Research, a short selling firm that produced a damning report three months later accusing Milton and Nikola of hoodwinking investors by portraying inoperable products as fully functional and lying about its technology and partnerships. Eleven days after Hindenburg released that report in September 2020, Milton resigned as executive chairman.
Milton, 40, is scheduled to go to trial in September facing charges he lied to investors to pump up Nikola’s stock price. Bloomberg is releasing the audio from the June 2020 interview for the first time. What follows is an excerpt of the interview, edited for length and clarity.
Bloomberg News: So Trevor, the crux of it is, through the reporting we’ve been doing, we’ve learned the Nikola One prototype you unveiled on Dec. 1, 2016, was inoperable at the time you unveiled it, and the time leading up to it — that it was missing a number of components that would have been necessary for it to have been operable and able to drive. And crucially, that it did not have a fuel cell installed in it. What are your thoughts on that?
Trevor Milton: Yeah, no problem. So, there was no fuel cell in the truck. We never claimed there was. When we first announced that truck to everyone, it was a turbine-electric truck at that time. We had all the batteries, we had all the components in it to make that truck run, including e-axles. Everything was there. The batteries were there, everything was there to make it run, and with the turbine. We pulled the turbine out right before the show. We told everyone we were going fuel cell.
So no, it never had the fuel cell at the show. We never told anyone it did. Could it have driven? Yes, but it was not safe. So we never did, other than on a closed road, without it being underneath power. You’ll never see anywhere where I told people that the truck was ever driven. It just wasn’t safe to drive. We did do a demonstration with it for the video where we just let it coast down a road, because it just wasn’t safe to drive. If those electric motors or controllers took off, you would not be able to stop a truck that size, and you’d potentially kill people. So no, we never drove the thing. It was capable. Everything was there. The fuel cell wasn’t on it during that unveiling. I never told anyone it was. As a matter of fact, we told people at the unveiling there was no fuel cell in it.
BN: You said on stage that night, and in an on-camera interview the following day, that the truck was not a pusher. But for all intents and purposes, what you’re saying is that it was a pusher?
Milton: No, a pusher is a vehicle that can’t be driven. That one actually was designed to be driven and had all the components to be driven. We were planning on going out and actually taking that vehicle and doing testing with it, powering it. But at that point we just decided, you know what, let’s scrap this one and let’s quickly build one that has all the changes in it that we’ve learned from. So, you know, it’s not a pusher because that thing could actually drive. It had the full e-axles, it had the full batteries. It was huge. It had everything in there: controllers, inverters, batteries, power steering. It had everything in it to be able to drive, so it was not a pusher, but it just wasn’t safe enough to drive. By the time we got into it further, over the next few months, we decided it’s just not worth it.
BN: Again, on something you said at the time, both on stage and in the interview the following day, you said you had unveiled the world’s first zero-emission fuel cell semi truck. The thing is that, if it had been a natural gas turbine right up until the the switch to fuel cell, it wouldn’t have been zero emissions?
Milton: This is kind of a little bit of a gotcha question, because we did unveil that. We told everyone we switched over. Everyone knew we had a turbine. There was no deceiving. We were very clear and open about it. We told everyone, we moved away from a turbine to a zero-emission because at that point the technology was starting to get there.
We unveiled the truck at Nikola World. We took the turbine out of it. It was totally functional. You could drive it. We decided not to, but it was, every single component in that vehicle was made to drive. It had real e-axles, real electric motors, real batteries, real everything in there that even today could be driven if we had to. For safety, we never did it because we didn’t trust the components. We were like, well, if something happens, if this thing takes off, someone’s going to die. So we decided to start over and build a better one, but we never deceived anyone.
I said it was going to have the fuel cell. This is what this truck is going to be designed for, and so we did that. We built one completely redesigned that was safer, that we could put a fuel cell in. I never told anyone we had a fuel cell in that truck when I unveiled it.
It was all-electric. And that was what we were showing people is, look, this is going to be the entire change of the world. This is the first-ever fuel cell, zero-emission semi truck. I never said it had a fuel cell in it. And I was very clear to the audience. They got up there and took pictures. They were like, hey, where’s the fuel cell? And we told them, we said, well it’s not in this one, it is going to be, though.
That doesn’t mean you can’t tell people that this is going to be the first-ever zero-emission fuel cell truck. It’s just like a lot of vehicles when you don’t have all the features in them when you unveil them sometimes.
BN: When you say that it had all that it needed to run, but it didn’t have a fuel cell, how was it able to run, then?
Milton: Two different ways. One is it could have run as a turbine-electric, but that was not what we unveiled, but everyone knew about that turbine-electric all the way up to a few months before the unveiling. So we built it as a turbine-electric truck, every part on there functioned. We could have driven it as a turbine-electric truck, exactly as we promised.
A few months prior to the unveiling, we decided to head over to a fuel cell electric truck because we believed we did not want to have emissions on our truck. Fuel cell, obviously, there’s no way to have that ready within a couple months. That takes years. So it could have fully been driven on battery alone with no issue whatsoever. Everything in that truck functioned, and you can ask every engineer at Nikola, not a single person, not a single engineer at Nikola would tell you that those parts were not functionable. If we just spent a few weeks of safety, or a few months of safety testing to make sure that they were good, every part on there was functional. It was the real battery. We had them fully charged. Real e-axles. We just decided it wasn’t safe to drive.
BN: You mentioned a bit earlier on the call, and also when we spoke last week, that you guys did it, you got it up and running. You tested it in a closed environment. When did that driving test take place, and under what system? Was it just under battery? And do you have any video of that test that you can share with us?
Milton: Yeah, that’s online. So it was never driven under power. We took the rotors and stators out of it, because if it took off, we would kill someone. So underneath that test, we wanted to check some things. What we did is we just started it on an incline and we let it coast to make sure that we wouldn’t have any issues with safety. And we only did that for video purposes only. We never invited anyone out there. We never did anything.
Phillips wanted to do a commercial on it. Phillips is a company that does truck parts. So we told Phillips, we said look, we’re not going to power this truck. We’re not going to take it out, it’s just too dangerous. Like if the thing takes off, people are going to die, and believe me, electric vehicles, when you first start developing them, they take off. Like, Tesla has had tons of people where the cars just randomly took off. We didn’t want to be in a spot where a huge semi truck was going to go barreling down a freeway and kill a bunch of people.
So we told Phillips, not going to happen. And they said, well, will you take the main component out? Can you take something out to make it safe? And we said yes, we can take the rotors and stators out of here and it can still coast. And they said OK, we want to be able to video this thing coasting, and we said OK, no problem. So we took it out. We closed the road off. We allowed it to coast. It still had operable brakes and everything. It had operable steering, it had operable everything. We just didn’t feel safe to turn it on. As you know, theoretically, we never ran that thing underneath power. And we never claim. If you look back at every interview I ever did in my life, I never claimed that truck was under power.
BN: But you did say it was not a pusher.
Milton: That’s true, it’s not a pusher.
BN: But those things do not seem reconcilable if it cannot drive under its own power.
Milton: No, it can drive. That’s the thing you’re missing. I get this, you guys have got a report, you want to create headlines, but let me be real clear with you: it was not a pusher. It could have easily been driven. I chose not to drive it for the safety of our company. If that truck would have taken off, I would not be here today. So it was not a pusher. I just chose not to drive it. There’s a big difference between those two things.
BN: Through our reporting, we learned about some of the specific components that were missing from the Nikola One prototype, fuel cell aside. The motors were hollow, the motor core was not even installed in what was onstage, and a number of the gear components were also missing. And while the battery was in place, it wasn’t connected to anything. Essentially the cables were just attached into hollow space. Are you able to comment on that?
Milton: Yeah, you do that for safety. All the parts were there, though. We had every single one of the parts there that were built for assembly. I can show you the entire CAD models, the parts that were actually built fully. It was completely done. Those parts were taken out for safety because, like I said, that’s the only thing preventing that vehicle from taking off. So we just, we took the rotors and stators in the gears, they’re not in there. There’s no reason to be in there, because I’m not going to drive it, but we have them all, we even still, I think we had them all, you know, we have photos of all of them. We have all the CAD models. I can show you every one of them. We had one of the best gear designers in the world that did it all. They can tell you that they actually assembled the entire thing. We took this stuff out. There’s just no way, no reason to keep it in.
If you have some kind of failure inside of your gear system, the rear end of that truck would launch in the air. So no, we don’t have those pieces in there for safety. We actually had them out on tables to display them to everyone. So we showed everyone all the gears and the rotors and the stators, but we just, we didn’t have them inside the gear housing. Even today, we don’t have them in the gear housing. In our showroom, they’re still out.
BN: At what point did you have a functioning prototype that used a fuel cell, and who provided that fuel cell?
Milton: The Nikola Two was the first vehicle we ever drove under power, that was safe enough to drive. It was done in conjunction with Robert Bosch. So we had a joint venture set up with Bosch for the fuel cell, or a joint development agreement. And we worked for quite some time on that. And the Nikola Two was driven months before Nikola World 2019. So it probably would have been around either the fourth quarter of 2018, or the first quarter of 2019, would have been the first time we actually ever drove a semi truck under power of a fuel cell, where it was safe enough to drive, and the parts had gone through some validation and testing to ensure it wouldn’t, you know, wouldn’t kill anyone.
It’s very important to know, I’ve been through this with two or three people already, so it’s nothing that is new to me, getting asked about this. I never once ever told anyone that the Nikola One was powered by fuel cell. It was not a pusher. We could have driven it. We didn’t do it for safety, and you can ask any engineer at Nikola. There are 35 people that worked on that truck that could tell you that every component in that truck could have been driven.
We had all intents and purposes to actually drive that truck after Nikola World, but we just decided it was just not safe enough. I never deceived anyone. I understand people like to dig and pry, I have no problem with that. And you can ask anyone at Nikola that was there. They’ll tell you the parts were totally drivable. It was designed to be a real, drivable truck. We just never did it, for safety.
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