Nikola Motor: disaster foretold

this video was brought to you by pipedrive try pipedrive for free for 30 days by signing up with the link in the description to become the next game changer in zero emission vehicles you can't rely on just good design it seems that you also need to brush and bolt oh and lots of tweeting you're also bound to suffer from comparisons with other companies like tesla and their controversial founder elon musk one company had all the necessary ingredients an eccentric founder a seemingly perfect vehicle and many promises and we are talking about nikola motor and its mission for the future of transportation but it was a vision that shattered in a matter of months and we'll tell you all about nicola in this episode of company forensics nicola motor is born this company is the brainchild of trevor milton he is a bit of a dilemma half of the media calls him a veteran of the startup world having formed two prior startups the other half calls him a failure because his first two creations didn't amount to much his second startup the hybrid aimed to reduce emissions by modifying diesel engines and turning them into hybrids but the hybrid's existence was turbulent as one of its lead investors apparently robbed them of intellectual property then the hybrid's main ally swift transportation sued them for not delivering on the agreement to retrofit several of swift's trucks milton eventually sold it and found the nikola motor company in 2014. with this endeavor he aimed to create highly efficient trucks like many a controversial founder before him he wanted to take the road less traveled in an interview with forbes milton expressed that because he felt his idea was visionary he decided to hire engineers who had no experience with the automotive sector to have a different perspective of things such comments immediately drew comparisons with another millionaire who had no prior automotive experience elon musk something frequent in the future hey what did he expect having nikola tesla's name the first model sort of like tesla milton wanted to go big in may 2016 nikola released the nikola one semi truck features included six by six all-wheel drive electric motors and a whopping 2 000 horsepower thanks to its hydrogen fuel cell system which fed the electric motors it could also run a natural compressed gas which made it versatile the range was 1200 miles ideal for long-haul trucking and for those interested the down payment was just 1500. if semi-trucks weren't your thing then there was the zero an off-road utility terrain vehicle or utv which promised outstanding features in december 2016 at a show he assured everybody that the nikola one was on time and even hinted that the truck was operable fuel cells inside and all and people were blown away no less than seven thousand deposits came in for the truck and at fifteen hundred dollars each that totaled ten million dollars plus in real cash and a total of 2.3 billion when considering the truck's final price these numbers further hyped those around the company not long after he formed alliances with companies within the truck manufacturing business for nikola the future was bright milton promised that they'd be ahead of daimler volvo and pakar as the leader in truck manufacturers by 2019 but the one and the zero didn't exist so far they were only concepts this again drew comparisons with musk and his tendency to over promise and the trucking industry was wary of milton and nickel after all the 7000 reservations didn't provide enough for research development and production still milton invested 20 million dollars of his own money to calm those around him he was confident that he would be able to raise 300 million at the beginning of 2019 nikola purchased the rights to use land in arizona where they built their plant and produced in milton's words 50 000 trucks per year more and more hype in november of 2017 journalist fred lambert rode as a passenger in a stripped-down version of the nikola zero utv with no doors or screens he wrote alongside none other than trevin milton himself basic as that version was lambert was ecstatic he loved the ride the quiet motors and the comfortable suspension and even declared that the zero had more power than even the most powerful tesla then in 2018 giant einhauser bush placed a provisional order for 800 leases of the nikola one milton again promised to start delivery by 2020 and just one year later the company claimed there was a total of 14 billion dollars in orders milton told the world nicola had sold eight years worth of production finally he had raised the 300 million he promised and was now looking to raise 1.25 billion to fund the entire operation a big reason for the hype was that nikola wasn't just about trucks it was about providing a sustainable network of hydrogen supply to feed those trucks and it wasn't only the u.s nickel announced by late 2019 another vehicle the nikola tray based off an ivoco platform with an expected production date around 2022 or 2023. milton even fired at tesla saying that nicolas technology made their trucks five thousand pounds lighter and let's talk about that rivalry for a second nikola has always lived under tesla's shadow both have the same idea to build a clean energy network to supply their vehicles nikola even ventured into solar just like tesla but nikola wasn't just a small brother the company sued tesla claiming musk's company had copied their truck design tesla fired back saying there was no reason for the lawsuit but the legal battle continues now promises nikola wouldn't only be selling trucks but the hydrogen needed to power them and a nationwide fuel supply system so in the end each vehicle sold would give them about 750 dollars in revenue to tend to the average consumer they offered a badass truck called the badger and with it nikola aimed to dethrone the f-150 as the best selling truck in the us again just a bit much but milton sounded really confident and people bought into this confidence by the beginning of 2020 nikola was worth 23 billion dollars thanks to the public exchanges hype and the backing from big names like european truck manufacturers c h who invested 250 million dollars milton was now a billionaire correct that he was now the first hydrogen billionaire but there were no trucks none nikola was a company worth billions of dollars with zero revenue and the media started to take notice after all that 23 billion dollar valuation was as big as their projected sales for 2024. meanwhile milton didn't seem to care about having zero revenue in an interview with cnbc he said investors cared more about changing the world and the environment then he said that the plant in germany was making trucks as they spoke with every public appearance milton pumped everybody up or so it seemed so is it a fraud or not nikola was one of the biggest names in clean vehicles even giant general motors announced they would take an 11 share in the company for 2 billion as part of the deal gm would manufacture the famous badger in their plans nicholas stock went up as much as 53 when the news came out so milton and nicola were having an excellent 2020 but some were suspicious of the fanfare journalist brian hobart said it best again using tesla as a comparison tesla is a story about how a ceo can ride the hype wave to build a real company that well often criticized by investors does manage to sell a game-changing product nikola is a darker story about a ceo who uses the same tools and abuses investors tendency to pattern match to build a business whose primary function is selling stock ouch but that's what it looked like only concept trucks and an over-enthusiastic ceo and then the hindenburg happened not that one but this one the hindenburg report the media started picking up on the noise such as the plant in germany which wasn't operational by the time milton had said it was in several interviews those renders over and over milton had said that he had come up with those designs in his basement but according to the financial times he purchased them from designers in croatia then journalists at ludlow discover that the truck displayed in 2016 wasn't even operational people around milton were alarmed when he said the nikola one was a functioning truck it had no fuel cells and to prove it moved the company rolled it down a hill melton answered back rapidly and said there was no fuel cell because of safety reasons and that he had never promised the car was actually working and here's where hindenburg research comes in they are a company dedicated to forensic financial research in september of 2020 just two days after gm had agreed to partnered with nicola they released a document indicating milton had lied repeatedly we have never seen this level of deception at a public company especially of this size the report shows the entire company is a lie from fuel cells to trucks to their fuel system here's an example some trucks only worked with compressed gas instead of hydrogen one of the trucks they unveiled couldn't run on hydrogen but milton stenciled h2 on it and said it did so can you paint ferrari on your civic and say it's a ferrari i don't think it's fair game crash and consequences the hindenburg report sent nicola crashing down the stock had reached a 93.99 value in june of 2020 and by the end of september it was 19 and still going down after the report many agreed nicola had no value and some analysts even predicted that the stock could drop as far as five dollars the allegations of fraud sparked a federal investigation for misleading investors milton on the other hand disappeared as soon as those words hit the airwaves he quit nicola and one week later erased all of his social networks his personal fortune went from six billion to two billion dollars still not too bad and he was out of a job but it didn't end there weeks later two women accused him of sexual harassment they plan to carry on with legal actions while he has denied the charges so this is a collapse but of one man not the company nikola still exists gm even said they're interested in more involvement with nickler when they announced this both stocks went up just a bit perhaps nicola is just about that hype and people believing it but eventually they will have to deliver on that promise milton won't be the one but perhaps under the right guidance the company can see your sales clearly and feel organized every day with pipedrive it's the easy to use sales tool that you don't need an i.t degree to work visually track your leads pipelines and communications in one neat place and never forget what to follow up about again it automates your day so you can spend time on customers not on legwork no lengthy setup or training means you can jump in with both feet from day one break free from endless cycles of typing and retyping data in multiple places spending hours searching for last conversations and forgetting important details pipedrive has helped 90 000 companies worldwide close over 24 billion dollars in deals again you can try it for free for 30 days and get 25 off on your first three months which side are you on about nikola let us know in the comments and we'll see you next week [Music] you

Channel: Slidebean

Views: 137,165

Keywords: nikola motors, nikola stock, trevor milton nikola, trevor milton, nikola stock analysis, nikola investigation, trevor milton nikola motors, trevor milton vs elon musk, nikola vs tesla, tesla vs nikola, nikola truck, nikola motor truck, nikola motor failure, company forensics, slidebean, caya slidebean, slidebean ceo, nikola motors trevor milton, nikola fraud explained, nikola fraud or not

Id: 4QMai1tWuyM

Length: 11min 24sec (684 seconds)

Published: Wed Nov 11 2020