Nikola appears to be facing a very steep hill ahead, with reports suggesting that founder Trevor Milton has left the company effective immediately. The update was published by Freightwaves, a highly regarded semi-truck-focused publication that cited sources close to the hydrogen fuel cell truck maker that was fighting.
Trevor Milton will also resign as Executive Chairman in the wake of his departure. He would remain as one of the major shareholders of the company, but he will have no say on how to handle Nikola going forward. Sources from the publication noted that it was Milton’s decision to resign and leave, and it was done to protect Nikola and his investment.
“Nikola is truly in my blood and always will be, and the focus should be on the Company and its world-changing mission, not me. So I made the difficult decision to approach the Board and volunteer to step aside as Executive Chairman. Founding Nikola and growing it into a company that will change transportation for the better and help protect our world’s climate has been an incredible honor,” Milton noted in a press release.
According to reports, Milton owns around 82 million Nikola shares to date. That means about 20 percent or about $2.8 billion of the hydrogen fuel cell truck maker.
Stephen Girsky, former vice president of General Motors and a member of Nikola’s board, was named as chairman of the board with Milton stepping down, effective immediately. In the press release of the company Milton noted that he is optimistic that Girsky is the right person to lead Nikola as the company moves forward. He also remained positive about the leadership of Nikola, which he believes will allow the business to achieve its full potential.
“As we move forward, I am confident Steve is the right leader to guide our vision at the Board level. In addition to being an early believer and supporter of Nikola, Steve has more than 30 years of experience working with OEM leaders, suppliers, dealers, labor leaders and national policy makers, and has served as a director of numerous public companies.”
“We’ve built a deep bench of talent over the years, and I am confident that Nikola’s Chief Executive Officer, Mark Russell, supported by Chief Financial Officer, Kim Brady, and the rest of the leadership team will advance our goal of making Nikola the global leader in zero-emissions transportation. I want to thank all of Nikola’s employees, investors and partners who have shared in my vision and rallied behind Nikola during this time,” Milton noted.
For his part, Girsky has expressed his enthusiasm for his new appointment. “I want to thank Trevor for his visionary leadership and significant contributions to Nikola since its founding. Trevor saw the possibility of creating an end-to-end zero-emission transportation system when the industry was still in its nascent stages and took action to build the Nikola of today, with world-class partnerships, groundbreaking R&D, and a revolutionary business model. I know I speak for everyone at Nikola in our gratitude and in wishing him all the best,” he said.
The departure of Milton marks yet another extraordinary development in the saga of Nikola, which in recent weeks has gone on a complete roller coaster ride. Nikola was rattled by a report from short-seller company Hindenburg Research following a blockbuster announcement of a manufacturing agreement with GM for its Badger pickup, which alleged that Milton and the company had a history of misleading investors and the media.
Among Hindenburg’s main allegations are that Nikola misrepresented the developments they made with their vehicle and technology ventures. Nikola and Milton later published a response to the company’s allegations, but the release discussed just a fraction of the allegations raised by Hindenburg. Nikola also contacted the SEC in accordance with its response, stating that it welcomes the involvement of the regulator. A later article from The Wall Street Journal suggested that the company’s SEC review was in its early stages and that Nikola’s inquiry was joined by the US Department of Justice.
Nikola has gained a polarizing reputation. Although the company is praised by its backers for its grand vision of a future zero emissions dominated by hydrogen-powered long-haulers, critics have argued that Milton’s claims to Nikola’s vehicles are unreal. The active presence of former Nikola executive on Twitter further added its vocal opponents to the company’s skirmishes.
Although the departure of Milton is likely to be a blow to Nikola, the company actually appears to have legitimate projects under way. For example, despite the controversy surrounding the Hindenburg report, GM Chief Executive Mary Barra said the veteran American automaker remains committed to the Nikola contract. With that in mind, the Badger’s release can still occur, but it will be fascinating to see if Nikola goes on without her creator. “Our company has worked with a lot of different partners. We’re a very capable team that has done the appropriate diligence,” she said.
Read the full press release from Nikola about the departure of Trevor Milton here.
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