How To Nuke Your Reputation: The Nikola Edition

(Mis)Uses of Technology

from the going-downhill dept

This isn’t so much in vogue as it was in the past, but it still remains true that one’s reputation is a scarce resource that can be frittered away easily. And, on these pages at least, it is often equal parts perplexing and funny to watch some folks in the tech space torpedo their own reputations for various reasons. The more shrewd don’t always seem to care about this sort of thing, which is how you get the MPAA pirating clips from Google to make its videos, or a law school taking a critic to court only to have the court declare said critic’s critique was totally true. Good times.

Which brings us to Trevor Milton, the founder of Nikola Motor Company. Nikola is playing in the electric truck vehicle space. In 2016, Milton announced in an official video that the Nikola One Semi was “fully functional.” In fact, one of Milton’s chief public concerns at the time was ensuring that nobody could come by and drive away with one of the trucks. The companion video for the Nikola One was posted to YouTube in January of 2018. This video shows the Nikola One chugging down a lonely one-lane road.

Despite all of the fanfare, it’s worth noting that the Nikola One never made it into production. Why? Well…

Hindenburg Research published a bombshell report claiming that the Nikola One wasn’t close to being fully functional in December 2016. Indeed, Hindenburg published a 2017 text message exchange in which a Nikola employee stated that the company didn’t resume work on the truck in the months after the show.

Even more incredible, Hindenburg reported that the truck in the “Nikola One in motion” video wasn’t moving under its own power. Rather, Nikola had towed the truck to the top of a shallow hill and let it roll down. The company allegedly tilted the camera to make it look like the truck was traveling under its own power on a level roadway.

Now, on the one hand, that’s objectively funny. It’s sort of an Adam West’s Batman approach to product demonstration. But, on the other hand, now that Milton has admitted the charges above, he’s likely in a whole world of trouble. The company has tried to weasel out of this in fairly absurd fashion.

“Nikola never stated its truck was driving under its own propulsion in the video,” Nikola wrote. “Nikola described this third-party video on the Company’s social media as ‘In Motion.’ It was never described as ‘under its own propulsion’ or ‘powertrain driven.’ Nikola investors who invested during this period, in which the Company was privately held, knew the technical capability of the Nikola One at the time of their investment.”

Not everyone seems to think that’s true. The SEC and DOJ are reported to have opened investigations into the company’s behavior after these revelations. And, as to the point of Milton’s reputation personally, he’s out at Nikola.

Milton’s resignation came just 10 days after a bombshell research report revealed that Milton wasn’t telling the truth in 2016 when he unveiled the company’s first product, the Nikola One, and claimed that it “fully functions.”  Over the weekend, Milton offered (voluntarily, he says) to resign as executive chairman, and Nikola’s board accepted his offer. Milton will also relinquish his seat on Nikola’s board.

Now, a few items of note. First, Nikola does now have a functioning prototype, the Nikola Two. It’s also partnering with several automobile companies and has contracts in place with them.

But for Milton, he loses his position at the company he founded, millions in stock and consulting fees, and has gained infamy as someone who is willing to, at best, mislead the public about his companies’ products. Your reputation is a scarce good. Frittering it away by turning the camera on an angle probably isn’t the best move.

Filed Under: electric truks, electric vehicles, fake videos, nikola one, trevor milton
Companies: nikola