Electric vehicle manufacturer Nikola has admitted that its hydrogen-powered electric lorry was just rolling downhill in a promotional video rather than moving using its power.
In the video, posted by Nikola founder in January 2018 and garnered over 260,000 views, the electric lorry appeared to be driving along a desert highway.
The 2018 video was captioned: “Behold the 1,000 HP zero-emission Nikola One semi-truck in motion.”
Although Nikola denied misleading investors and false advertising and mentioned that they have filmed a working lorry in 2019, an investigation is currently being conducted by the US Securities and Exchange Commission (SEC).
The company said it had “contacted and briefed” the SEC and that it plans to give its full cooperation with the inquiry.
Nikola has now admitted that the lorry in the video did not have a working hydrogen fuel cell but its gearbox, batteries and other components were functional.
The firm also admitted that it had used a third-party inverter, a key electrical component, and hid it using a sticker in the video but argued that this was “common practice” among vehicle manufacturers
Nikola emphasized that it was designing, engineering and working on its own inverters.
Hindenburg fraud allegation
Last week, a report was published by Hindenburg Research alleging Nikola of several misdeeds, including a claim that the company and its founder and executive chairman Trevor Milton presented a product as being closer to market than it was in reality.
According to Hindenburg, it had corroborated a Bloomberg report from June which claimed that Milton ”exaggerated” the capabilities of the initial launch of its hydrogen fuel cell electric semi-truck, the Nikola One.
While Milton claimed that the Nikola One “fully functions” at its 2016 launch, the Bloomberg report indicated that it was not actually drivable as the company claimed. In an interview with Bloomberg, Milton said he “never deceived anyone.”
The company’s stock fell by 14.5% on Friday, following an 11% decline on Thursday.
Nikola is disputing Hindenburg’s allegations saying: “Nikola has been vetted by some of the world’s most credible companies and investors. We are on a path to success and will not waver based on a report filled with misleading information attempting to manipulate our stock.”
“As Nikola pivoted to the next generation of trucks, it ultimately decided not to invest additional resources into completing the process to make the Nikola One drive on its own propulsion,” the electric vehicle company explained.
It argued that Hindenburg Research’s claims were “false and defamatory” and designed to benefit so-called short sellers, including Hindenburg.
Milton also described the report in a tweet as a “hit job by hindenburg” and an attempt at stock manipulation and promised a detailed rebuttal.”
On Friday, the manufacturer announced that it has hired a law firm to explore legal action against Hindenburg and that it plans to present the issue to the US Securities and Exchange Commission (SEC).
However, Hindenberg insisted: “We stand by our research 100%. The company answered none of the 53 questions we raised in our report after promising a full rebuttal.”