Trevor Milton, a self-styled pioneer of hydrogen-powered transport, this week experienced the highs and lows of life as a visionary entrepreneur out to change the world.
On Tuesday, the 38-year-old college dropout announced a $2bn partnership under which General Motors would build his company’s electric pick-up trucks, while also supplying it with hydrogen fuel cells for its heavy trucks, or semis. Shares in Mr Milton’s start-up, Nikola, jumped more than 50 per cent — although they didn’t return to their June high, when the company was briefly worth more than GM itself.
Yet 48 hours later, a report from Hindenburg Research called his company an “intricate fraud”. The allegations included claims that Nikola had faked product demonstrations and passed off other companies’ technology as its own. The stock gave up almost all this week’s gains, while Mr Milton was reduced to fulminating in a video posted to Twitter: “The more they come at me, the stronger it makes me.”
On the day sandwiched between these extremes, the Nikola founder was doing what he does best: bragging about his supposedly world-beating technology, over-egging his company’s achievements, and dismissing his many critics on social media for a supposed lack of imagination.
In an interview with the Financial Times, he talked about Nikola — whose only tangible results are two hydrogen truck prototypes — as though the Arizona-based company had already revolutionised the world of transportation. “I knew I had a chance to change the world. And that's what I did,” he said.
If we were already in full production our stock wouldn’t be at 45 bucks a share, it’d probably be at a thousand
He checked off his company’s supposed accomplishments: “We’ve got the most advanced semi truck in the world, we’ve got more technology around hydrogen fuelling stations than anyone else in the world, we have $10bn in orders with our semi truck.” On top of that are the “billions of dollars in orders” for the battery electric vehicle that GM will build, “the most advanced pick-up truck the world’s ever seen”.
Of those orders cited, he added: “That’s damn near seven years of production, sold out. It’s about as good of a company you could ever dream of building.”
In this relentless barrage of hype, delivered in a disarmingly low-key manner, it is easy to forget the reality. Nikola has yet to put any vehicles into production. And, as its regulatory filings make clear, it has no orders at all for its fuel cell trucks, only non-binding reservations.
As for all the technological brilliance — spanning not just fuel cells, which some of the world’s biggest carmakers have spent years and billions of dollars trying to perfect, but also the highly complex and expensive business of creating a national network of hydrogen fuelling stations, as well as supposedly revolutionary new battery technology — there is precious little to be seen. Nikola boasts a grand total of only 11 patents in the US, with another 55 applications pending.
Undaunted, Mr Milton insists that Nikola owns the intellectual property covering “the entire core” of its vehicles, and that it will begin producing trucks next year. “If we were already in full production our stock wouldn’t be at 45 bucks a share, it’d probably be at a thousand.” That would value the company at around $370bn — even more than Tesla, whose value has soared above the rest of the car industry this year.
Mr Milton’s personal journey, from college dropout to fuel cell pioneer, sounds as unlikely as the story he spins about Nikola. It has taken him through a seemingly haphazard series of start-ups: an alarm company, an online flea market, a business that converted diesel truck engines to run on natural gas, and a natural gas storage business. But in his own rendition, they have all been part of a coherent path on the way to revolutionising global transport.
His epiphany came at the age of six, he says, when seeing electric trains at the Union Pacific railroad where his father worked led to the vision of a pure electric freight truck.
Mr Milton was a high school dropout before he was a college dropout — he says he doesn’t “learn well through studying books, I learn through hands-on experience”. A Mormon, one of his most formative experiences was on a mission in São Paulo: “It taught me to not be selfish. It taught me to care about others and taught me to build people up, not tear them down.”
An unshakeable self-belief in the face of hardship may well be Mr Milton’s most telling quality.
Nikola chief executive Mark Russell, who first encountered the entrepreneur as a customer years ago, sums it up in one word: persistence. “That’s Trevor’s great strength. What he sees is what he’s chasing, and he doesn’t see the obstacles or the challenges or the failures,” he said.
Mr Russell was so enamoured that he persuaded his former company to buy Mr Milton’s gas storage company, then later quit and went to work at Nikola.
Walking a fine line between hype and reality is not new for tech leaders — Tesla’s Elon Musk has turned it into an art form. But Mr Milton takes things to a whole new level.
Mr Russell, who one Nikola employee describes as a mentor to the younger founder, tries to laugh off his protégé’s exaggerations. Comparing him to “people who promoted great ideas in the past”, he added: “Does he do it exactly the way you or I might do it? Probably not.”
Whether he has overstepped the line is less clear.
Nikola faked a video of one of its trucks by making it look like the vehicle was driving under its own power when it was really only rolling downhill, according to Hindenburg’s report — a claim backed up by FT reporting this week.
“It was built to be a working prototype,” Mr Russell insists of the truck.
But did it actually work? His answer, after a long pause: “I wouldn’t comment on that.”
Asked about Mr Milton’s claim to have all the “core” technology for its vehicles, Mr Russell described the company as an “integrator”, stitching together the many elements of its vehicles from a complex supply chain. “The most important thing you can deliver to any market is an overall solution,” he said.
GM have since said they “stand by the statements we made in announcing the relationship”.
Nikola has threatened legal action against the short seller, which is betting against the company’s shares, meaning it profits if the stock falls.
Over-promising about the current state of a consumer technology may help to generate excitement among customers, says an executive at a rival electric truck start-up, but in the hard-nosed trucking business there is less patience for empty promises — particularly when it comes to a supposedly revolutionary technology like fuel cells.
“It’s challenging to sell the dream and the vision, when the vision takes 20 years to build,” this person said.
Mr Milton isn’t one to let a small problem like that get in his way. Hours after the critical hedge fund report came out, he shot back on video: “It goes to show you that when you’re changing the world . . . these people love to take you down.”
It was reminiscent of another lauded tech visionary who came under intense scrutiny for allegedly overstating her company’s achievements. “This is what happens when you work to change things,” Elizabeth Holmes, the founder of blood-testing start-up Theranos, said after she first came under attack. “First they think you're crazy, then they fight you, and then all of a sudden you change the world.”
Ms Holmes is now facing a fraud trial over claims that she faked technical demonstrations, among other things. Mr Milton, by contrast, is still at the helm of a company worth $14bn, and bent on going all the way.
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