By Staff Reporter |

The Phoenix-based Nikola Corporation filed for bankruptcy this week — Arizona gave millions in incentives and tax credits to the company over the past five years. 

Nikola develops electric- and hydrogen-powered vehicles. The company’s bankruptcy comes after years of federal investigations for fraud concerning the company’s innovation and development claims.

In 2019, Nikola received $1.3 million in pre-approved incentives based on projections. That year, projected new jobs were estimated at 400 and the average wage of projected new jobs was estimated at $80,500. The Arizona Commerce Authority (ACA) earned Project of the Year by the Area Development Magazine for bringing on the company. 

In 2020, ACA awarded Nikola the highest single pre-approved A-1 incentives grant out of seven awardees for the Arizona Competes Fund Program: $3.5 million. That year, ACA projected Nikola capital investment to be at around $1 billion. Projected new jobs were estimated at over 2,000, with the average wage of projected new jobs at $65,000.

That was the year Nikola had an estimated value of $30 billion.

ACA also gave Nikola a pre-approval for a $7.1 million tax credit. In 2021, ACA then post-approved Nikola for a $6 million tax credit as part of the Qualified Facility Incentive Program. Nikola was one of 19 businesses to receive the award that year. 

The company paid $125 million in a settlement to the Securities and Exchange Commission (SEC) that year, though Nikola didn’t claim wrongdoing. 

In 2023, ACA pre-approved Nikola for a $3.74 million tax credit as part of the Qualified Facility Incentive Program. Nikola was one of 24 businesses to receive the award that year. 

That year, Nikola founder Trevor Milton was convicted of fraud and sentenced to four years in prison for making false and misleading claims to encourage investor demand. Despite resigning from the company in 2020 and the federal investigations into Milton, ACA continued to give millions in financial incentives to Nikola. 

The Department of Justice (DOJ) in its announcement of Milton’s sentencing described Nikola’s promise as a mirage:

“Milton made false claims regarding nearly all aspects of Nikola’s business, including: (i) false and misleading statements that the company had early success in creating a ‘fully functioning’ semi-truck prototype known as the ‘Nikola One,’ when MILTON knew the prototype was inoperable; (ii) false and misleading statements that Nikola had engineered and built an electric- and hydrogen-powered pickup truck known as ‘the Badger’ from the ‘ground up’ using Nikola’s parts and technology, when MILTON knew that was not true; (iii) false and misleading statements that Nikola was producing hydrogen and was doing so at a reduced cost, when MILTON knew that in fact no hydrogen was being produced at all by Nikola, at any cost; and (iv) false and misleading claims that reservations made for the future delivery of Nikola’s semi-trucks were binding orders representing billions in revenue, when the vast majority of those orders could be cancelled at any time.”

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