- Back in September, General Motors struck up a
deal with EV startup, Nikola to make and sell electric trucks. The news threw the automotive
industry through a loop. Why the heck would such
a big company like GM partner with Nikola, a
company with no track record. The events that followed
can only be described as an absolute cluster truck (beep) There were lies, there were lawsuits and
there was even a sex scandal. How did such a shady company
get anyone to trust them? Why are the Feds coming
after Nikolas founder and why hasn't GM pulled out of the deal? We're gonna find out. (slow music) Big thanks to Omaze for sponsoring this episode of WheelHouse.
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again, to omaze.com/donut and enter to win now. Good luck. Let's get back to the episode. Electric vehicles are
becoming a bigger sector of the automotive industry every year. And in order to stay relevant
in the years to come, auto makers need to make
major electric moves. (electricity zapping) Moves like a full-size electric truck. The first OEM to offer an affordable, capable and reliable pickup
truck is gonna be raking it in. So it's natural that GM
would maximize efforts to take a piece of that market. They're one of the
largest and most storied multinational auto
manufacturers in the world, but, they're not very big on taking risks. So in classic GM fashion,
they're a little late to begin the game. So, before we talk about
why the GM, Nikola deal might be a huge mistake, let's take a look at
the founder of Nikola. Possibly the biggest con man,
the car world has ever seen. Let me tell you, I've seen a lot. Also, I wanna state for the record that I know Nolan Sykes,
do not hold any stock in either of these companies,
neither does Donut Media. Any opinions in this video are motivated by genuine confusion
and a lot of frustration. The man behind Nikola motor company and the character at the center of this future HBO documentary series is this guy, Trevor Milton. He's a college dropout from Utah, and one of those guys with an overactive entrepreneurial spirit. Which means he probably
doesn't tip servers. Plus he's got a couple business
failures under his belt. In 2014, Milton joined
the race to beat Tesla and founded his own EV company with a suspiciously similar name, Nikola. (laughing) Why would you? You can't name your
company after the same guy. (laughing) It's like starting
a car company named Henry. Anyway, Milton's mission for Nikola, was to be a leading
manufacturer of battery and hydrogen fueled zero
emission semi-trucks. So he assembled a team with
no relevant experience. For example, his brother, Travis, whose most recent work experience was pouring concrete on
driveways, was named, Director of Hydrogen
Production and Infrastructure. I'm not saying pouring
concrete is a bad job, he's probably very good
at it. I'm just saying, what the hell does he know
about hydrogen production? But somehow through charisma and luck, Trevor and his bro managed
to drum up interest in their startup. In 2016, a mere two years
after it was founded, Nikola unveiled the Nikola One. Their hydrogen fueled Class 8 truck, which was projected to go
into production in 2020. And I'll admit the prototype
looked pretty awesome. And despite its lack of
any proven technology, Milton claimed over and over
that the truck was quote, "Not a pusher." - This is not a pusher. It's not just a pusher. - And that it was quote,
"Fully functional." - It's a fully functioning vehicle, which is really incredible... - The lady doth protest
too much me thinks. Despite the weirdly defensive statements, maker of Crispy boys, Anheuser-Busch bought into the buzz and
provisionally ordered 800 trucks. This was a huge moment for Nikola, as the order for this
trucks place by Anheuser generated massive interest,
investment and more pre-orders. And on June 24th of this year, Nikolas stocks went public, making Milton an overnight billionaire and legitimizing Nikola as a force in the electric truck game. And then, something happened
that no one anticipated. On September 8th of this year, GM announced that it'd
be teaming up with Nikola to manufacture Nikolas new electric and hydrogen field pickup
called, the Badger. The Badger would have up to 906 horsepower and 980 foot pounds of
torque, a 600 mile range plus insane options, like water
fountains and refrigerators. I actually do like how the thing looks. It's got like electric Raptor vibes. If it was real, it'd be cool. Up until this point, Nikola had been developing
the Badger by themselves. But, under the GM deal, they
would still design and sell it under the Nikola name, but GM would lend the
hydrogen fuel cell technology they developed with Honda as well as their new Ultium battery. For providing the much
needed tech and engineering, GM would get 11% of the company in return. That's equivalent to $2 billion in equity. It's a lot of mulla. But that's not all. They would also be the
sole provider of fuel cells in all Class 7 and 8
trucks outside of Europe for four years. Plus, they would nominate a
director to Nikolas board. This deal was major. And when it was announced,
Nikolas stock shot up by 33%, which I don't own any stocks, so I don't know what that means. I don't know if that's,
that sounds big, it's a big. At the time, it seemed like
a win for everyone involved and they all lived happily ever. For two days. (camera shuttering) On September 10th, something big happened. These guys called the
Hindenburg Research Group, released a report called quote, "Nikola: How to Parlay An Ocean of Lies "Into a Partnership With
the Largest OEM in America". This thing is the Hindenburg of reports, a 67 page scathing take-down
of Nikola and Trevor Milton. It explains in great detail how his entire career was
built upon dozens of lies, that he's somehow managed to jockey into a $20 billion company. But why believe these guys? Who's to say the report isn't
just a bunch of malarkey? Well, for one thing,
they had the receipts. There were documents, emails, texts and a long list of whistleblowers ready to out Trevor for the liar he is. It is juicy, it is ruthless and it was the catalyst
for this giant controversy. Let's go over just a few
of the most shocking lies that the report uncovered. (upbeat music) Remember when Nikola
unveiled the Nikola One, the electric Semi that
launched this company into the billions. Well, it never worked. Bloomberg initially reported that it was never even completed. It couldn't even power
itself at the unveiling. There was a cable snaked
up through the stage, so it's lights turned on. They had artists stencil
H2 and zero emission on the side of the truck, even though it had zero
hydrogen components on board. Multiple whistleblowers
that worked on the launch said that they had to
run to the hardware store for loose parts during the show. That's Donut (beep) right there. You know what, props, shout out to Leah. Actually, this stool's a little, you'd like a little, Leah. Under pressure, Milton eventually admitted that it was never finished but claimed that he never said it was, but he did many times. In another bold move
of complete dishonesty. Milton released a video of the Nikola One quote, "In motion." It was pretty sick, I
remember watching it. It was a zero emission Semi-truck speeding down a highway in the desert. But according to text messages
from a former employee, this was also a lie. The Semi was actually towed
to the top of the hill and rolled down it like a Tonka truck. (farting sound) And Milton didn't just
lie about the vehicles he wasn't making. In 2019, Trevor claimed
that Nikolas' headquarters were powered completely by
3.5 megawatt solar panels that he had installed on the roof. - We have 3.5 megawatts
of solar up on the roof producing about--
- However, aerial photos show no such panels. That's not even a good lie. Eddie with a drone could've just prove it. If you say, "Okay, we've got
solar panels on the building." Nobody's gonna be like, really, really. I'm gonna go check it out. It's more like, okay, we
know this guy's a liar, let's just see if he's
lying about this stuff. And then we find out that that's a lie. In the same year, Nikola
promised a new battery that would revolutionize the industry, but it turned out to be vaporware, it was totally non-existent. And the president of the acquiring company had been found to use a NASA expense account,
to procure sex workers. You got to use your money for that dude. This year, Milton claimed
that just like Tesla, all of Nikolas components
were made internally. - [Trevor] But we do do all
the E axle design in house, all the gears, the gear reductions, the thermal, the cooling, even the controls that go with it. And also the inverters as well. - But it only takes a
quick Google image search to reveal that his inverters are actually from a
company called Cascadia, and that he covered their
logo with some electrical tape in promotional videos. Premiere isn't even that hard to use. I can figure out how to do that, you don't need to use electrical tape. Look, that is a lot of lying and that's not even everything. I gave you this little bits and pieces. Built on the lies of a
poor man's Elon Musk, a sham, just like that one
lady with a deep voice, with the blood pills. - This is what happens when
you work to change things. - This is what happens when
people think you're not doing something and you are (crowd booing) Of course, Trevor Milton and Nikola did deny the allegations of fraud, but with all of Hindenburgs receipts, well, the damage had been done. The department of Justice
launched a federal investigation in the Milton's lies
about having technology and misleading investors. With the Feds on his tails for fraud, Milton stuck his tail between his legs and resigned as Nikolas
executive chairman. And still, for some reason, GM stuck by their deal with Nikola. Even as the cards kept falling around this poor poor company. Maybe with Milton gone, they could help salvage the Nikola name. After all, his replacement
as executive chairman was Stephen Girsky a
former GM Vice Chairman who just happened to be the
architect of the deal with GM, a total coincidence, I'm sure. Maybe the whole Milton debacle would just stay in the
rear view where it belong and damage control could commence. But then, another bomb dropped on Nikola. Two women, one of whom was Milton's cousin accused Trevor of sexual assault. Wow, if you thought this guy was bad now, this really sends old Milton into a deeper level of hell, okay. Milton quotes, "Strongly
denies the allegations." But quite frankly, his track
record doesn't bode well for his credibility. After the news broke, GM changed their tone
regarding the deal with Nikola for the first time quoting, "In light of recent allegations regarding "the personal behavior of Nikola's "former executive chairman, Trevor Milton, "we want to emphasize that GM strongly condemns sexual
harassment and abuse of any kind. And it seemed like the deal might finally come to a bitter end. No one wants to be involved
with a sexual assault scandal. But to everyone's surprise
GM didn't back out and negotiations are continuing. So why is GM doing this? Why would they wanna be associated with the absolute dumpster
fire that Nikola has become? The simple answer is that
there's no downside for GM in this deal. It cost them nothing. There are several outs in the agreement and all they would have to
do, is employ technology that they were already
developing and producing. If the partnership somehow
succeeds after all this, GM gets a stake in the company, a sweet deal providing fuel cells and maybe most importantly, practice running an EV company
on someone else's dime. It's pretty genius. From a reputation perspective though, GM can stay relatively under the radar when it comes to their
partnership with Nikola. The EBS they produce would
be branded, sold and repaired by Nikola, GM stays clean
from complaining customers. And if you're not watching the finance in automotive
headlines like I am, the average consumer would barely notice. If Nikola goes under, the worst damage that GM would sustain, is a temporary black
eye on its reputation. Plus, they get Nikolas facilities, which would support their
need for EV real estate. There's no downside. They come out relatively
unscathed if it goes bad, and if Nikola happens to deliver after GM gives them
all the tech they need, then that's a huge move
in the race against Tesla. It's just a win-win all around for GM. Things are coming up General Motors. I think the big question that we're all waiting to be
answered as the story develops is, will GM pull out of the deal? They don't have much to lose from it. But in light of recent revelations, it seems that the reputation backlash might be bigger than expected, after, all Milton is a convoy and an accused sexual assaulter, not a great name to be connected to. I think they're gonna use
this to their advantage and do some major strong arming
while renegotiating terms. I think they'll take a much larger percentage of the company,
probably around 30%. And along with Steven Girsky, lead a sort of rebrand
and hopefully name change, to close the deal. GM is under major pressure
to compete with Tesla, and with the Tesla semis
arrival creeping up on us, GM has an opportunity to give
them a roll down the hill for their money. I think they're gonna treat
Nikola like their EV branch while maintaining a safe enough distance as to not tank their
reputation completely. Do I think they should do this? Not really. I think they should back out of the deal and distance themselves from the bad vibes and continue to work with
Honda to make their own EVs. After all, the Bolt has
more technology in it than the entire Nikola facility. Thank you very much for
watching WheelHouse this week, it means a lot. I really love Evs, so to see this huckster come in and take advantage of
people's optimism basically for this technology is really messed up, and kind of sets EVs back a little bit. But, this kind of stuff happens
in every technological leap. So, I'm not surprised that. We have podcast, not a
lot of you know that. If you wanna hear more in depth hour long stories from car history, check out Past Gas, wherever
you get your podcast. Also, we have a membership program. If you hit that join button down there, you get access to a discord
server, behind the scenes videos and special stickers and
offers before anyone else. And we're not going behind
a paywall or anything, it's just bonus stuff for those
extra hardcore Donut fans. It's just a little, something extra. Thank you very much for watching, be kind. I'll see you next time.
So GM didn’t lose any actual money, apart from all of the time they wasted here. They arranged an exclusive supplier deal in exchange for worthless equity....
Nikola didn't even have an IPO, did a reverse merger to avoid scrutiny by the SEC. Then rolled a motor-less vehicle down.
I got banned from the subreddit for telling an "investor" that using options to cover himself isn't incompatible with being a "believer"
why would you go balls to the wall and buy 800 unproven vehicles? Why not 10 or 20?
Off topic, but this youtuber has nearly a billion views and says he doesn't own any stocks. What is he doing with his money?
i love a good Donut Media video
GM keeps on trucking despite itself. Truly a testament that failing upwards is totally a thing that happens
how did anyone buy into this. the name pretty much gives away the troll job