As the electric car hype continues to grow it’s only getting more likely that unscrupulous fraudsters may seek to mislead the public.
It was the kind of truck the Terminator might drive – at least when he needed extra cash. Sleek, silent and faintly sinister, the Skynet-esque lorry, filmed speeding through an American desert in 2018, seemed proof of its maker’s technological prowess.
“Behold,” boasted the electric vehicle (EV) company Nikola. “The 1,000 HP, zero-emission Nikola One semi-truck in motion.”
The claim was technically true. The lorry was indeed moving. But as the Arizona-based start-up admitted last week, it was moving because it had been towed up a hill and then left to roll.
“Nikola never stated its truck was driving under its own propulsion in the video,” a spokesman defiantly declared. “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.”
After the admission forced Nikola’s chairman and founder Trevor Milton to resign, shares in the company plunged on Monday.
But the implications were much bigger than just one firm. The news – part of a bombshell report by the short-selling investment firm Hindenburg Research, whose conclusions Nikola dismissed as “false and misleading” – came just days after General Motors agreed to invest $2bn (£1.53bn) into Nikola.
Throw a briefcase full of cash in Silicon Valley today and you will hit an EV company, many racing towards an early public float. There is Rivian, Nio, Fisker, Workhorse, Lordstown Motors, XPeng, and of course Tesla, whose breathtaking stock rally this year has dragged many imitators behind it.
But as the original EV pioneer prepares for its latest “battery day” on Tuesday, when it will hold its annual meeting and show off new ideas, whispers of a bubble are only growing. Tesla’s own history of failed predictions hardly helps matters.
“It looks awful,” says Reilly Brennan of the San Francisco venture capitalist firm Trucks VC, referring to Nikola’s ordeal. “This is the warning shot of how eventually things are going to roll out over the coming decades. And it could very well be that some of these companies are overvalued.”