Nikola founder leaves EV startup as fraud allegations refuse to die

Nikola founder Trevor Milton is stepping down as Executive Chairman of the electric vehicle startup, amid allegations of fraud and exaggerated claims about just how revolutionary – or production-ready – its technology is. Milton will be replaced by Stephen Girsky, former Vice Chairman of General Motors, it was confirmed; the automaker announced a deal with Nikola earlier this month.

Then, GM said it would take a stake in Nikola Motors and be responsible for producing its Badger pickup truck. The vehicle has been promised in both all-electric and hydrogen fuel-cell variants, with up to 600 miles of range and load capacity more than sufficient to take on traditional, gasoline- and diesel-powered pickups.

While the news sent Nikola's stock soaring, it was quickly followed by a huge exposé. Hindenburg Research, a short-seller of Nikola, published a lengthy investigation in which it claimed the startup had over-exaggerated its progress in EVs, misled on just how groundbreaking its battery and other technology was, and generally been in large a fabrication by Milton in the hope of driving up a false valuation. High-profile demonstrations of Nikola's commercial trucks, the report claimed, had been effectively fabricated by manipulating video of a prototype rolling downhill to make it look as though it was under its own power.

Beyond that, it was suggested that Nikola's much-vaunted progress in hydrogen fuel-cells was mainly hot air, with the automaker now using GM's technology instead. Neither, too, have Nikola's plans to produce hydrogen itself panned out. In August, Nikola inked a deal to produce all-electric refuse trucks for Republic Services.

Milton denied the allegations, but it was clear that the GM deal was being overshadowed. In the face of further questions – and the prospect of both an SEC investigation and a Department of Justice investigation – Milton has opted to step away from the company.

"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 said in a statement today. "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."

Nikola maintains that building its own factory for production is on the agenda. Before that, however, it has partnered with other companies to actually produce its products. Its trucks will be manufactured in Europe, while GM will build the Badger pickup.

Nikola stock (NKLA) is down around 20-percent this morning after the news was confirmed.