Nikola In Pilot Testing With Walmart, SAIA As Founder Awaits Sentencing In Fraud Case

Nikola In Pilot Testing With Walmart, SAIA As Founder Awaits Sentencing In Fraud Case

By Terri Jo Neff |

Just weeks after its founder was convicted of federal fraud charges, Phoenix-based Nikola Corp. (NKLA) announced Third Quarter 2022 financial results showing higher than expected revenues and a narrower than expected quarterly loss.

On Thursday, Nikola Corp. reported revenues of $24.2 million, GAAP net loss per share of $0.54, and non-GAAP net loss per share of $0.28. The company also revealed it produced 75 heavy-duty Nikola Tre battery-electric vehicles (BEVs) at its plant in Coolidge, outpacing the 50 BEVs which came off the assembly line last quarter.  

Nikola also announced pilot testing of its Tre BEVs is underway with Walmart and SAIA, and that 63 of its trucks have been delivered to dealers.

“During the third quarter we continued to produce and deliver Nikola Tre BEVs to dealers and customers,” said new Nikola President, Michael Lohscheller. “We also made significant advancements in developing our energy business, announcing our intent to develop access of up to 300 metric-tons per day of hydrogen and up to 60 stations by 2026, and our collaboration with E.ON in Europe.”

Founded in late 2014 by Trevor Milton, Nikola seeks to transform the transportation industry by designing and manufacturing zero-emission BEVs  and hydrogen-powered fuel cell electric vehicles (FCEVs). The company is also a leader in EV drivetrains, vehicle components, energy storage systems, and hydrogen station infrastructure.

As AZ Free News previously reported, Milton was stripped of any role in the company in 2020 following an investigation by the U.S. Securities and Exchange Commission into allegations Milton repeatedly lied to investors, prospective investors, and the public about Nikola’s research and development progress as well as sales contracts in an effort to increase the company’s share price.

Then-CEO Mark Russell sought to move Nikola forward from the scandal, agreeing the company would pay a $125 million civil penalty to the SEC. Russell retired this summer, putting Nikola in the hands of Lohscheller, who previously served as CFO for several top automakers, including Mitsubishi Motors, Volkswagen Group USA, and German-based Opel/Vauxhall. Lohscheller was promoted in 2017 as CEO of Opel, where he helped plan the company’s move toward being an electric-only brand by the end of this decade.

Meanwhile, company officials fully cooperated with the U.S. Attorney’s Office in New York which took Milton to trial Sept. 12 on four fraud charges.  The nearly month-long trial ended with the jury deliberating for less than seven hours before convicting Milton of two counts of wire fraud and one count of securities fraud.

A not-guilty verdict was handed down on another count of securities fraud.

Milton, who avoided pretrial detention by posting a $100 million bond, was granted permission by a federal judge to remain out of custody his until Jan. 27, 2023, sentencing. He is facing up to 20 years in prison, with prosecutors calling for a “significant” prison term in light of numerous warnings to Milton about his misrepresentations.

Nikola has recently announced several highpoints, including:

  • Acquiring land in Buckeye for the construction of a hydrogen production hub with project partners. The company is working through zoning and permitting processes and has already ordered some long lead-time equipment;
  • A multi-year purchase order for 100 Tre BEVs by Zeem Solutions, which specializes in fleet truck leasing;
  • A stock-only purchase of California-based Romeo Power, which is expected to result in a large savings for Nikola on battery-pack costs;
  • An intent to develop access of up to 300 metric-tons per day of hydrogen and up to 60 dispensing stations by 2026. The company sees potential benefits from the Inflation Reduction Act.
Nikola In Pilot Testing With Walmart, SAIA As Founder Awaits Sentencing In Fraud Case

Nikola Founder Awaits Decisions On Federal Fraud Charges And SEC Lawsuit

By Terri Jo Neff |

Nikola Corp. founder and former chairman Trevor Milton is awaiting a decision in the next few weeks from a federal judge on whether fraud charges filed against Milton in July will be dismissed, or in the alternative, his trial held somewhere other than New York.

The company founded by Milton in 2014 has its corporate offices in Phoenix and its manufacturing plant in the town of Coolidge. Nikola has a combined workforce of nearly 650 focused on the development and production of electric-powered light duty and heavy duty trucks, but the number of jobs is expected to double in the next few years.

Milton, 39, is also expecting a decision in October about whether a parallel federal civil case filed against him by the U.S. Securities and Exchange Commission will be put on hold as requested by the U.S. Attorney’s Office for the District of Southern New York. The DOJ has expressed concern that having both cases running at the same time could prejudice the criminal prosecution.

In a statement released when Milton’s indictment was announced this summer, the company was looking forward.

“We remain committed to our previously announced milestones and timelines and are focused on delivering Nikola Tre battery-electric trucks later this year from the company’s manufacturing facilities,” according to the statement.

Milton resigned last year from all involvement with the company. The 49-page federal grand jury indictment was released by federal prosecutors just weeks after Nikola had a public stock offering which reportedly earned Milton hundreds of millions of dollars, if not even one billion, in stock value.

According to prosecutors, Milton is accused of telling myriad lies to investors, prospective investors, and the public from November 2019 and through September 2020 about Nikola’s research and development progress as well as sales contracts in an effort to increase the share price of the company he founded in 2014.

Milton pleaded not guilty to two counts of securities fraud and one count of wire fraud at his arraignment in New York. He is awaiting trial out of custody after posting a $100 million personal recognizance bond secured by real estate property in Morgan, Utah and in Coatsville, Utah.

Court records show Milton had to surrender any passports or travel visas, as well as any firearms as a condition of his pretrial release.

The securities fraud counts carry maximum penalties of 20 and 25 years in prison, respectively. The wire fraud count carries a maximum penalty of 20 years in prison.

Anyone who believes they are a victim of Milton’s statements may contact the U.S. Attorney’s Office via USANYS.NIKOLAVICTIMS@USDOJ.GOV