In re Nikola Corporation

 
UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES ACT OF 1933 
Release No. 11018 / December 21, 2021 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 93838 / December 21, 2021 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-20687 
 
 
In the Matter of 
 
Nikola Corporation,  
 
Respondent. 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS, PURSUANT TO 
SECTION 8A OF THE SECURITIES ACT 
OF 1933 AND SECTION 21C OF THE 
SECURITIES EXCHANGE ACT OF 1934, 
MAKING FINDINGS, AND IMPOSING 
REMEDIAL SANCTIONS AND A CEASE-
AND-DESIST ORDER 
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public interest that public cease-and-desist proceedings be, and hereby are, instituted pursuant to 
Section 8A of the Securities Act of 1933 (“Securities Act”) and Section 21C of the Securities 
Exchange Act of 1934 (“Exchange Act”) against Nikola Corporation (“Nikola” or “Respondent”). 
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”), which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 
herein, except as to the Commission’s jurisdiction over it and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-
and-Desist Proceedings, Pursuant to Section 8A of the Securities Act of 1933 and Section 21C of 
the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and a 
Cease-and-Desist Order (“Order”), as set forth below.   
 
 
 
 
 
 

 
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III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that: 
 
Summary 
 
1. Nikola, a publicly traded zero emissions transportation system provider, made 
numerous material misrepresentations to investors about key aspects of its business.  From at least 
March 2020 through September 2020, Nikola deceived investors about its products, technical 
advancements, and commercial prospects.   
 
2. Nikola primarily misled investors through scores of misrepresentations by its CEO 
and later Executive Chairman, Trevor R. Milton (“Milton”).  Before Nikola had produced a single 
commercial product or had any revenues from truck or hydrogen fuel sales, Milton embarked on a 
public relations campaign aimed at inflating and maintaining Nikola’s stock price.  As described 
further below, from at least March 2020 through September 2020, Milton’s statements in tweets 
and media appearances, individually and taken together, painted a picture of Nikola that diverged 
widely from its then-current reality. Milton misled investors about, among other things, Nikola’s 
technological advancements, in-house production capabilities, reservation book, and financial 
outlook.   
 
3. Nikola further misled investors by misrepresenting or omitting material facts about 
the refueling time of its prototype vehicles, the state of its headquarters demonstration hydrogen 
station, the anticipated cost and sources of electricity for its hydrogen production, and the 
economic risks and benefits associated with its contemplated partnership with General Motors.  In 
addition, Nikola failed to maintain disclosure controls and procedures as required by the Exchange 
Act rules for issuers with a class of securities registered under the Exchange Act. 
 
4. As a result of the conduct described above, Nikola violated Section 10(b) of the 
Exchange Act and Rules 10b-5 and 13a-15(a) thereunder and Section 17(a) of the Securities Act. 
 
Respondent 
 
5. Nikola Corporation is incorporated in Delaware and is headquartered in Phoenix, 
Arizona.  Nikola is a vertically integrated zero emissions transportation system provider that 
designs and manufactures battery electric vehicles (“BEV”), hydrogen fuel cell electric vehicles 
(“FCEV”), and hydrogen station infrastructure.  Since approximately 2016, Nikola has focused on 
producing FCEV trucks.  Later, Nikola also began to develop BEV trucks.  Nikola’s common 
stock is registered pursuant to Section 12(b) of the Exchange Act, and is quoted under the ticker 
symbol “NKLA” on the Nasdaq Global Select Market.  
 
 
 
                                                
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 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any other 
person or entity in this or any other proceeding. 

 
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Relevant Person 
 
6. Trevor R. Milton is a resident of Oakley, Utah.  In 2015, he founded Bluegentech 
LLC, which in July 2017 converted from a limited liability company to a Delaware corporation 
and changed its name to Nikola Corporation (“Legacy Nikola”).  Milton was Chief Executive 
Officer (“CEO”) and Chairman of the Board of Directors of Legacy Nikola from its inception until 
June 3, 2020, when Legacy Nikola entered into the Business Combination (as defined below).  
From June 3, 2020 until September 20, 2020, Milton was Nikola’s Executive Chairman.  
According to Nikola’s filings with the Commission, Milton resigned as Executive Chairman of 
Nikola and from Nikola’s Board of Directors on September 20, 2020. 
 
Background 
 
 Nikola and its Business 
 
7. Nikola was created through the merger of Legacy Nikola and VectoIQ Acquisition 
Corp. (“VectoIQ”), a Delaware corporation headquartered in New York, New York.  VectoIQ was 
formed in January 2018 as a special purpose acquisition corporation, or SPAC, for the purpose of 
effecting a business combination with one or more businesses.  VectoIQ completed an initial 
public offering in May 2018, at which time its securities began to be quoted on The Nasdaq Capital 
Market.   
 
8. On March 2, 2020, VectoIQ and Legacy Nikola entered into a Business 
Combination Agreement (the “Business Combination Agreement”), as well as certain related 
agreements, pursuant to which Legacy Nikola would merge with a subsidiary of VectoIQ, with 
Legacy Nikola remaining as the surviving company and as a wholly-owned subsidiary of VectoIQ.  
On June 3, 2020, Legacy Nikola and VectoIQ consummated the merger contemplated by the 
Business Combination Agreement (the “Business Combination”), and VectoIQ changed its name 
to Nikola Corporation.
2
  On June 4, 2020, Nikola’s common stock and warrants began trading on 
the Nasdaq Global Select Market.  
 
9. Nikola advertised a business model that, among other things: (i) offered a bundled 
lease for its trucks that included the cost of hydrogen fuel; (ii) planned to construct a nationwide 
network of hydrogen refueling stations around routes of customers who have committed to lease 
Nikola’s trucks; and (iii) sought to obtain cheap electricity that would enable the company to 
produce hydrogen at a fraction of current market rates.   
 
10. Nikola’s business plan required billions of dollars of capital to finance the 
development and manufacturing of trucks and station infrastructure.  From 2015 through March 
2020, Nikola raised over $500 million through private offerings directed mostly at institutional 
investors.  In connection with the Business Combination, VectoIQ raised from institutional 
investors approximately $525 million in a private investment in public equity (“PIPE”) offering.    
As a result of the Business Combination, Nikola received a net contribution of approximately 
                                                
2
 Unless specified otherwise, references in this Order to Nikola refer to, depending on the context, Legacy Nikola 
prior to the Business Combination and to Nikola Corporation after the Business Combination.  References in this 
Order to VectoIQ refer to VectoIQ prior to the Business Combination. 

 
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$594.5 million from VectoIQ, an amount that excludes a $70 million payout to Milton made at the 
closing of the transaction.  
 
Relevant Securities Offerings and Filings 
 
11. In connection with the Business Combination, on March 13, 2020, VectoIQ filed 
with the Commission a Registration Statement on Form S-4, which included a Preliminary Proxy 
Statement, Prospectus, and Information Statement.  On May 8, 2020, this Registration Statement 
was declared effective and VectoIQ filed a Prospectus, a Notice of Meeting, and Proxy Statement. 
 
12. On June 15, 2020, Nikola filed with the Commission a Registration Statement on 
Form S-1 relating to (i) the issuance of Nikola common stock issuable upon the exercise of 
warrants originally issued by VectoIQ, and (ii) the offer and sale from time to time of Nikola 
common stock held primarily by the PIPE investors, VectoIQ’s sponsor, and certain of its 
affiliates.  This Registration Statement was declared effective on July 17, 2020.  On July 17, 2020, 
Nikola filed with the Commission a Registration Statement on Form S-1 relating to the offer and 
sale of Nikola common stock held by the founding shareholders of VectoIQ and by certain pre-
Business Combination investors in Nikola (including entities controlled by Milton).  This 
Registration Statement was declared effective on July 27, 2020. 
 
13. Many of Nikola’s false and misleading statements in this Order were made at the 
time securities were being offered and sold pursuant to these registration statements.   
 
Milton Aggressively Promoted Nikola  
 
14. During the time that he was CEO and then Executive Chairman, Milton was 
Nikola’s primary public spokesperson.  Milton used his personal Twitter account (@nikolatrevor) 
and personal Instagram account (@lakepowelltrevor) to publish material information about Nikola.  
When tweeting or posting material information about Nikola from his personal accounts, Milton 
did so in his capacity as CEO or Executive Chairman of Nikola.   
 
15. Beginning at least as early as June 2020 and continuing through September 20, 
2020, Milton included the following publicly available bio on his Twitter account:  “Founder, 
Executive Chairman of @nikolamotor Nasdaq traded: NKLA.  It’s our duty to leave the world a 
better place and inspire people.  Instagram: lakepowelltrevor.”  Milton also posted material 
information about Nikola from its corporate Twitter account (@nikolamotor).  Milton repeatedly 
urged television viewers and podcast listeners to follow his social media accounts, claiming he 
used them to communicate “accurate data” about Nikola in a way that would enable followers to 
receive information “way faster than you get it anywhere else.” 
 
16. In the weeks prior to and following the June 3, 2020 Business Combination, Milton 
significantly increased his media presence, appearing on dozens of nationally televised programs 
and podcasts and tweeting hundreds of times.  He told Nikola executives that his frequent media 
appearances and increased activity on social media were part of a “media blitz” designed to 
generate investor interest in Nikola, and that he hoped his presence on these platforms would 
increase and maintain the company’s stock price.   

 
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Nikola Did Not Have Adequate Disclosure Controls or Procedures  
Regarding Milton’s Social Media Use and Media Appearances  
 
17. Nikola’s disclosure controls and procedures for monitoring or reviewing Milton’s 
interviews and social media activity were deficient from at least June 3, 2020 through September 
2020.   
 
18. Milton did not routinely consult with anyone at Nikola before publishing Nikola-
related information on his or Nikola’s social media accounts, or before being interviewed about 
Nikola on television programs and podcasts.  Likewise, no one at Nikola routinely reviewed 
Milton’s social media posts prior to their publication, and executives and employees alike 
frequently learned of Milton’s interviews after they aired.  Further, Nikola did not correct these 
statements. 
 
19. Nikola did not design, implement, or maintain adequate disclosure controls or 
procedures to assess whether the information Milton published via social media and television and 
podcast appearances was required to be disclosed in Nikola’s Exchange Act reports within the time 
periods specified in the Commission’s rules and forms.  Similarly, Nikola did not have processes in 
place to ensure that information published by Milton was communicated to management to allow 
timely decisions regarding required disclosure. 
 
Nikola’s Material Misrepresentations to Investors through Milton 
 
20. From approximately March 2020 through September 2020, in his capacity as CEO 
and later as Executive Chairman of Nikola, Milton made materially false and misleading 
statements on numerous critical topics related to Nikola’s capabilities, technology, reservations, 
products, and commercial prospects. 
 
21. Nikola One Capabilities.  Milton made false and misleading statements about the 
capabilities of Nikola’s first semi-truck prototype, the Nikola One, which could not run under its 
own power when Nikola unveiled it in December 2016 or at any time thereafter.  For example, in 
or around early 2018, Milton posted, or directed the posting of, a video clip to Nikola’s Twitter and 
Facebook accounts depicting the Nikola One truck moving on a road, seemingly at a high rate of 
speed.  The video had no narration or text.  The text of the tweet in which the video was embedded 
stated: “Behold, the Nikola One in motion.  Pre-production units to hit fleets in 2019 for testing.  
The Nikola Hydrogen Electric trucks will take on any semi-truck and outperform them in every 
category:  weight, acceleration, stopping, safety and features – all with 500-1,000 mile range!”  
The “In Motion” video remained posted on Nikola’s corporate Twitter, Facebook, and YouTube 
accounts, as well as on its website, and was available for viewing by investors and prospective 
investors until at least September 2020. 
 
22. The video and the caption on the January 25, 2018 tweet were misleading because 
the video showed the Nikola One moving down a road with text that told viewers to “behold” the 
Nikola One “in motion,” while omitting the fact that the truck was rolling down an incline due to 
gravity rather than under its own power.  The “In Motion” video thus left viewers with the false 
impression that the Nikola One was capable of moving under its own power. 

 
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23. Hydrogen.  Milton made a series of false and misleading claims about Nikola’s 
then-current hydrogen production capabilities, its costs to produce hydrogen, and the costs at 
which it obtained electricity to produce hydrogen profitably.   
 
24. In order to support the FCEV trucks that Nikola projected to put on the road, Nikola 
would need to produce tens of millions of kilograms of hydrogen each year.  To do so, Nikola 
represented to investors that it intended to produce hydrogen via electrolysis, a process that uses 
electricity to split water into hydrogen and oxygen.  However, producing Nikola’s projected 
amount of hydrogen via electrolysis would require a significant amount of electricity.  For 
purposes of its projections, Nikola assumed it could obtain electricity at an average of $0.035 per 
kilowatt-hour (“kWh”) – a rate significantly cheaper than prevailing industrial rates – based on its 
expected large consumption and its goal of obtaining lower-cost renewable electricity during non-
peak hours or sourcing it “behind the meter” (i.e., from a source other than the grid).  Nikola 
disclosed that if it was not able to obtain electricity at a significant discount to prevailing rates, it 
would not be profitable.  Accordingly, Nikola’s ability to produce hydrogen – and do it cost-
effectively – was a critical component of the company’s overall business model. 
 
25. From approximately November 2019 through September 2020, Milton falsely 
claimed in posts from his personal Twitter account and in appearances on podcasts and television 
programs that, among other things:  (i) Nikola was then currently producing hydrogen; (ii) Nikola 
reduced its cost to produce hydrogen from $16 per kilogram down to either $3 or $4 per kilogram; 
(iii) Nikola had contracts with electricity providers at rates of $0.03 or $0.04 per kWh; and (iv) the 
electricity that Nikola purportedly had sourced was generated using renewable or “clean” methods.  
All of these statements were false and misleading, because from inception through at least 
September 2020, Nikola never produced any hydrogen, did not have a station permitted to produce 
hydrogen, and did not have any contracts signed with any electricity providers.   
 
26. Badger.  Milton falsely and repeatedly claimed that Nikola had engineered and 
already completed a prototype of an electric pickup truck, the Badger, and that this vehicle used 
primarily Nikola’s proprietary components.   
 
27. From at least February 2020 through at least June 2020, Milton misrepresented that 
Nikola had “designed” or “engineered” the Badger to meet particular specifications, and that the 
prototype had already been completed.  Milton made these statements in a Nikola press release that 
he drafted, as well as in posts from his personal Twitter account and in appearances on podcasts.  
The statements about Nikola having “designed” or “engineered” the Badger to meet particular 
specifications were false and misleading. At the time of these statements, Nikola had not 
performed any engineering work or any design work other than CGI renderings of a Nikola 
employee’s prior illustrations, and Nikola’s third-party suppliers were only completing computer-
aided design and beginning tooling.   
 
28. From at least April 2020 through September 2020, Milton also made several false 
statements in posts from his personal Twitter account and on podcast appearances regarding the 
proprietary nature of the Badger.  Milton asserted, among other things, that Nikola built the Badger 
“from the ground up,” “own[s] all the tech” and “developed all the tech” in the Badger, and that it 
“put” a “billion dollars” of its semi-truck technology into the Badger.  All of these statements were 

 
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false, as third-party suppliers built the Badger prototype using “donor” vehicles manufactured by 
another company and little, if any, of Nikola’s technology was used on the Badger prototype.   
 
29. Truck Reservations.  Milton made several false claims about Nikola’s truck 
reservations and orders.  As a pre-revenue company, Nikola consistently emphasized to potential 
investors that its pre-order book, which it characterized as a “backlog of interest,” was a sign that 
the company was primed for profitability in the near future based on interest in its flagship FCEV 
semi-truck product.  Although the vast majority of the pre-orders were indications of interest that 
were cancellable at any time, Milton misrepresented the non-binding nature of these orders.  For 
example, in an appearance on a podcast on July 31, 2020, Milton stated that the pre-orders were 
“not letter of intents, they’re actually contracts. . . .  Yeah, billions and billions of dollars with 
contracts.”  This statement was false and misleading because Nikola had only one customer whose 
order for 800 FCEV trucks could be characterized as binding.  There were not billions and billions 
of dollars in binding orders. 
 
30. Similarly, Milton misrepresented the nature of the truck orders contemplated by 
Nikola’s agreement with a publicly-traded waste collection company (“Customer A”) for an order 
of 2,500 to 5,000 trucks.  For example, Milton claimed on his personal Twitter account that this 
was the “[l]argest class 8 zero emission order in the industry 2,500 guaranteed.”  This statement 
was false and misleading, as under the terms of the agreement, for Customer A to incur any 
obligation, a series of conditions would have to be met, not all of which were even under Nikola’s 
control.  Moreover, if the parties could not agree on essential terms (including price, service and 
parts network, warranties, training program, and more), Customer A had the ability to terminate the 
agreement anytime on 30 days’ notice.  Finally, even if Nikola could meet all of those obligations, 
Customer A still had the right to cancel its orders without liability or penalty as long as the delivery 
date was at least 120 days out.   
 
31. “Breakthrough” Battery Technology.  Milton claimed falsely that Nikola “has 
achieved” a significant breakthrough in battery technology that would result in enormous 
performance gains for Nikola’s vehicles.  Milton made this claim in a November 19, 2019 press 
release that he drafted and Nikola published.  The press release contained several unqualified 
claims relating to the “new battery,” including, among others, vehicle range, energy density, 
number of cycles, and weight.  In the days and months following the publication of the press 
release, Milton made similar statements in tweets from his personal account and in appearances on 
podcasts.  These statements were misleading because they failed to disclose that the claimed 
battery attributes were applicable to coin-size battery cells that were being developed and tested in 
a controlled lab environment as part of a university research project.  This fact was significant 
because to scale these coin-size lab-level cells to even a prototype size would require further 
development with no assurance of comparable performance levels.  From there, developing the 
cells from prototype cells to commercial grade quality was a further, significant undertaking, with 
no assurance of utility for commercial applications. 
 
32. In-House Component Development.  Milton made numerous misstatements about 
Nikola’s in-house component development and manufacturing capabilities.  For example, from 
approximately February 2020 through at least August 2020, Milton made statements in posts from 
his personal Twitter account and in appearances on podcasts that created the misleading impression 

 
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that Nikola manufactured its own batteries and that Nikola designed the entire battery.  These 
statements were false and misleading because Nikola used a third-party supplier to manufacture 
batteries for its first production vehicle, and this supplier both designed the modules for the 
batteries and provided Nikola assistance in the design of the battery pack.  Further, Nikola lacked 
the capability to manufacture these batteries on its own.  Similarly, during the same time period, 
Milton claimed in tweets and on podcast appearances that Nikola designed its own inverter.  This 
statement was false because Nikola used “off the shelf” inverters for all of its semi-truck 
prototypes and it planned to use “off the shelf” inverters for its first production vehicle. Finally, 
Milton misled investors when he stated in an Instagram Live video posted from his personal 
Instagram account that Nikola “does full electric fluid submersion batteries” that “cool and heat . . . 
much faster, much more efficiently,” and are “able to stop thermal propagation.”  This statement 
was misleading because it omitted to disclose that the submerged batteries to which Milton was 
referring were only being used in two truck prototypes and had severe functional limitations and 
associated safety issues.  Milton’s statements misled current and prospective investors to believe 
that these batteries were viable when, in fact, they were not. 
 
33. Total Cost of Ownership.  Finally, Milton also falsely claimed that the total cost of 
ownership (“TCO”) of Nikola’s trucks was 20 to 30 percent below that of diesel vehicles.  
Commercial vehicle buying decisions, particularly for large corporate fleets, are driven, in part, by 
the TCO, an analysis of the lifetime cost of a truck, from the acquisition through the operating 
period.  By March 2019, Nikola had determined it could not project a TCO that was below that of 
diesel vehicles, and that its analysis of data could only support a projected TCO on par with diesel.  
However, on at least several occasions in July 2020, including during podcast appearances and in 
an Instagram Live video posted from his personal Instagram account, Milton falsely asserted that 
the TCO of Nikola’s vehicles was “20 to 30 percent” cheaper than of diesel competitors.   
 
34. In making the false and misleading statements described above, Milton at all times 
spoke in his capacity as CEO or Executive Chairman of Nikola. 
 
Nikola’s Additional Material Misrepresentations 
35. In addition to the material misrepresentations that Nikola made through Milton, as 
described above, Nikola made other material misrepresentations to investors.  These 
misrepresentations concerned hydrogen refueling time, the hydrogen demonstration station, the 
current and future costs and sources of electricity for the company’s planned hydrogen production, 
and the economic risks and benefits associated with its contemplated partnership with General 
Motors. 
 
36. Refueling Time.  Nikola presented a misleading picture of its hydrogen refueling 
capabilities.  Nikola understood that the ability to refuel FCEV trucks approximately as quickly as 
diesel trucks (10-15 minutes on average) was an important factor in achieving market adoption of 
FCEV technology.  However, hydrogen’s properties make it challenging to rapidly fill the tanks of 
a semi-truck.  Completing a refueling this quickly – known as a “fast fill” – requires, among other 
things, cooling and compression as part of the fueling process.  Although Nikola had an 
engineering plan and had run simulations that showed it was theoretically possible to conduct a fast 
fill in 20 minutes, it had not developed a solution to achieve a fast fill on a semi-truck.  Instead, it 

 
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took Nikola 45-80 minutes to fill its semi-truck prototypes with hydrogen in 2020.  However, after 
the Business Combination announcement, Nikola failed to disclose to the market the actual fill 
time of 45-80 minutes to investors.  For example, in an April 2020 investor presentation Nikola 
prepared and provided to investors, Nikola stated, without qualification, that the refueling time for 
its FCEV was “10-15 minutes.”  Nikola’s executives similarly claimed in 2020 that Nikola’s 
FCEV refueling time compared favorably with diesel trucks. 
 
37. Hydrogen Station.  Nikola misled investors in 2020 regarding the status of its 
demonstration hydrogen station.  Although Nikola was not producing hydrogen in 2020, it had 
installed a station at its headquarters designed to dispense test quantities of hydrogen it purchased 
from third parties.  In its Registration Statement on Form S-1, filed on June 15, 2020, as well as in 
certain subsequent Registration Statements and Prospectuses filed in 2020, Nikola touted the 
demonstration station at its headquarters as a “as a model for future hydrogen stations.”   This 
statement was misleading because Nikola failed to disclose that this station was beset by 
significant operational and repair challenges.  Nikola’s analysis showed that the station operated 
only 21% of the time during 2020. 
 
38. Electricity.  Nikola made material omissions about costs and sources for electricity 
related to the company’s planned hydrogen production – a critical component of its business 
model.  In its Registration Statement on Form S-1, filed on June 15, 2020, as well as in certain 
subsequent Registration Statements and Prospectuses filed in 2020, Nikola disclosed that: (i) for its 
hydrogen production, “electricity costs account for approximately 75% to 85% of the total cost”; 
(ii) securing a reliable source of electricity for each of its fueling stations at a price per kwh below 
market retail rates was critical to its business model; (iii) it planned to produce hydrogen on-site at 
each hydrogen station; (iv) parties have been able to secure “Power Purchase Agreements” (or 
“PPAs”) using solar energy at below market rates; and (v) the costs of energy production using 
solar and wind have been decreasing over time. 
 
39. Certain of Nikola’s statements regarding the cost and sources of electricity for its 
on-site hydrogen production were misleading.  Although it accurately highlighted its need to obtain 
a reliable source of electricity for its fueling stations, Nikola omitted to disclose that it would 
require up to approximately 5% of all electricity consumed in the United States in 2019 to produce 
sufficient hydrogen per year for the fully-deployed version of its planned hydrogen 
network.  Furthermore, although Nikola included some data about decreasing solar and wind 
electricity cost trends, it failed to disclose that its planned on-site hydrogen production would 
require Nikola to incur material additional costs beyond just the cost of electricity production, 
including, among other things, transmission, distribution, and energy storage costs.  Moreover, in 
conjunction with its representations about needing to obtain below market retail rates, Nikola 
omitted that in the months prior to its S-1 filing it received significantly higher per kWh price 
indications from grid and solar energy suppliers than its target price point (which were primarily 
driven by, among other factors, battery storage costs and grid connection, transmission, or 
distribution costs). 
 
40. The General Motors Partnership.  Nikola misled investors by failing to disclose the 
potential economic impact of the proposed strategic partnership between Nikola and General 
Motors, pursuant to which General Motors would produce the Badger.  In a press release dated 

 
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September 8, 2020 Nikola disclosed the strategic partnership with General Motors to develop the 
Badger and touted the purported cost-savings to Nikola from the partnership.  Specifically, Nikola 
claimed that it “anticipates saving over $4 billion in battery and powertrain costs over 10 years and 
over $1 billion in engineering and validation costs.”  This claim was misleading because, although 
Nikola touted potential cost savings, Nikola failed to disclose that unless the market could support 
a “premium” MSRP price for the Badger, Nikola’s internal projections showed that the entire 
Badger program could potentially generate a net loss of $3.1 billion over six years and threaten 
Nikola’s solvency.  A Nikola executive prepared these internal projections and provided them to 
Nikola’s senior executives and its Board, noting that the projected unit economics from both the 
“premium” and “market based” pricing approaches.  Nevertheless, Nikola went on to tout the 
discrete potential cost savings associated with one aspect of the program without disclosing the 
program’s overall potential financial impact. 
 
Violations 
 
41. As a result of the conduct described above, Nikola violated Section 10(b) of the 
Exchange Act and Rule 10b-5 thereunder, which prohibit any person from directly or indirectly in 
connection with the purchase or sale of securities knowingly or recklessly employing devices, 
schemes and artifices to defraud, making untrue statements of material facts, or omitting to state 
material facts necessary in order to make the statements made, in light of the circumstances under 
which they were made, not misleading, and engaging in acts, practices, and courses of business 
that operate as a fraud or deceit.   
 
42. In addition, as a result of the conduct described above, Nikola violated Section 
17(a) of the Securities Act, which prohibits, in the offer or sale of any securities, the employment 
of any device, scheme, or artifice to defraud, and further prohibits any person from directly or 
indirectly obtaining money or property by means of any untrue statement of a material fact or any 
omission to state a material fact necessary in order to make the statements made, in light of the 
circumstances under which they were made, not misleading, or engaging in any transaction, 
practice, or course of business which operates or would operate as a fraud or deceit upon the 
purchaser. 
 
43. In addition, as a result of the conduct described above, Nikola violated Rule 13a-
15(a) under the Exchange Act.  Rule 13a-15(a) requires issuers required to file annual reports 
pursuant to Section 13(a) or 15(d) of the Exchange Act to, among other things, maintain disclosure 
controls and procedures designed to ensure that information required to be disclosed by the issuer 
in the reports that it files or submits under the Exchange Act is recorded, processed, summarized 
and reported, within the time periods specified in the Commission’s rules and forms. 
 
Nikola’s Remedial Efforts and Cooperation 
 
44. In determining to accept the Offer, the Commission considered remedial acts 
undertaken by Respondent and cooperation afforded the Commission staff. 
 
 
 

 
 11 
Undertakings 
 
45. Nikola (including its officers, directors, and employees, and third-party consultants 
within Nikola’s control) shall continue to cooperate fully with the Commission with respect to this 
action and any related judicial or administrative proceeding or investigation commenced by the 
Commission or to which the Commission is a party and subject to compliance with applicable law.  
Nikola agrees that such cooperation shall include, but is not limited to:  
 
a. Production of Information: at the Commission’s request, upon reasonable 
notice, and without subpoena, Nikola (including its officers, directors, and employees, and 
third-party consultants within Nikola’s control) shall truthfully and completely disclose all 
information in its possession requested by the Commission staff in connection with the 
Commission’s investigation, litigation or other related proceedings;  
 
b. Production of Documents: at the Commission’s request, upon reasonable 
notice, and without subpoena, Nikola (including its officers, directors, and employees, and 
third-party consultants within Nikola’s control) shall provide any document, record or 
other tangible evidence in its possession requested by the Commission staff in connection 
with the Commission’s investigation, litigation or other related proceedings;  
 
c. Production of Cooperative Personnel: at the Commission’s request, upon 
reasonable notice, and without subpoena, Nikola (including its officers, directors, and 
employees, and third-party consultants within Nikola’s control) shall secure the attendance 
and truthful statements, deposition, or testimony of any Nikola officer, director, or 
employee or third-party consultant within Nikola’s control, excluding any person who is a 
party to any related litigated judicial or administrative proceeding, at any meeting, 
interview, testimony, deposition, trial, or other legal proceeding.  Nikola shall also use its 
best efforts to secure the attendance and truthful statements, deposition, or testimony of 
any former Nikola officer, director, or employee, excluding any person who is a party to 
any related litigated judicial or administrative proceeding, at any meeting, interview, 
testimony, deposition, trial, or other legal proceeding. 
 
The foregoing obligations are subject to Nikola’s reservation of rights: (i) to claim 
that documents or information requested is subject to attorney-client privilege, attorney-
work-product protection, or bank examiner privilege; and (ii) to seek entry of a 
confidentiality order as to: sensitive business documents or information; sensitive personnel 
documents or information; or confidential information pertaining to parties other than 
Nikola; and 
 
d. Service and Personal Jurisdiction Consents: Nikola further agrees that, with 
respect to this action and any related judicial or administrative proceeding or investigation 
commenced by the Commission or to which the Commission is a party, it will: (i) accept 
service by email, mail or facsimile transmission of notices, requests, or subpoenas issued 
by the Commission for documents or testimony at depositions, hearings, or trials, or in 
connection with any related investigation by the Commission staff (“Commission 
Service”); (ii) appoint Nikola’s attorney as agent to receive Commission Service; (iii) with 

 
 12 
respect to Commission Service, waive the territorial limits upon service contained in Rule 
45 for the Federal Rules of Civil Procedure and any applicable local rules, provided that 
the party requesting the testimony reimburses Nikola’s travel, lodging, and subsistence 18 
expenses at the then-prevailing U.S. Government per diem rates; and (iv) consent to 
personal jurisdiction over Nikola in any United States District Court for purposes of 
enforcing any Commission Service. 
 
IV. 
 
In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent’s Offer.  
 
Accordingly, pursuant to Section 8A of the Securities Act and Section 21C of the Exchange 
Act, it is hereby ORDERED that:  
 
A. Respondent Nikola cease and desist from committing or causing any violations and 
any future violations of Section 10(b) of the Exchange Act and Rules 10b-5 and 13a-15(a) 
thereunder, and Section 17(a) of the Securities Act.  
 
B. Respondent shall pay a civil money penalty in the amount of $125,000,000 to the 
Securities and Exchange Commission.  Payments shall be applied first to post order interest, which 
accrues pursuant to pursuant to 31 U.S.C. 3717.  Prior to making the final payment set forth herein, 
Respondent shall contact the staff of the Commission for the amount due.  If Respondent fails to 
make any payment by the date agreed and/or in the amount agreed according to the schedule set 
forth below, all outstanding payments under this Order, including post-order interest, minus any 
payments made, shall become due and payable immediately at the discretion of the staff of the 
Commission without further application to the Commission.  Payment shall be made in the 
following installments: 
 
 Due within 14 days of the entry of this Order:  $25,000,000 (the “Initial 
Payment”) 
 Due 184 days after the entry of this Order:  $25,000,000  
 Due 364 days after the entry of this Order:  $25,000,000  
 Due 544 days after the entry of this Order:  $25,000,000 
 Due 724 days after the entry of this Order:  $25,000,000  
 
Payment must be made in one of the following ways:  
 
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 

 
 13 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center  
Accounts Receivable Branch  
HQ Bldg., Room 181, AMZ-341  
6500 South MacArthur Boulevard  
Oklahoma City, OK 73169  
 
Payments by check or money order must be accompanied by a cover letter identifying 
Nikola as a Respondent in these proceedings, and the file number of these proceedings; a copy of 
the cover letter and check or money order must be sent to Eric Werner, Associate Director, 
Division of Enforcement, Securities and Exchange Commission, 801 Cherry Street, Suite 1900, 
Fort Worth, Texas 76102. 
 
C. Pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, a Fair Fund is created 
for the penalties referenced in paragraph IV.B. above.  Amounts ordered to be paid as civil money 
penalties pursuant to this Order shall be treated as penalties paid to the government for all 
purposes, including all tax purposes. To preserve the deterrent effect of the civil penalty, 
Respondent agrees that in any Related Investor Action, Respondent shall not argue that 
Respondent is entitled to, nor shall Respondent benefit by, offset or reduction of any award of 
compensatory damages by the amount of any part of Respondent’s payments of a civil penalty in 
this action (“Penalty Offset”). If the court in any Related Investor Action grants such a Penalty 
Offset, Respondent agrees that Respondent shall, within 30 days after entry of a final order 
granting the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of 
the Penalty Offset to the Securities and Exchange Commission. Such a payment shall not be 
deemed an additional civil penalty and shall not be deemed to change the amount of the civil 
penalty imposed in this proceeding. For purposes of this paragraph, a “Related Investor Action” 
means a private damages action brought against Respondent by or on behalf of one or more 
investors based on substantially the same facts as alleged in the Order instituted by the 
Commission in this proceeding.  
 
 
By the Commission. 
 
 
 
        Vanessa A. Countryman 
        Secretary 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES ACT OF 1933 

Release No. 11018 / December 21, 2021 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 93838 / December 21, 2021 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-20687 

 

 

In the Matter of 

 

Nikola Corporation,  

 

Respondent. 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS, PURSUANT TO 

SECTION 8A OF THE SECURITIES ACT 

OF 1933 AND SECTION 21C OF THE 

SECURITIES EXCHANGE ACT OF 1934, 

MAKING FINDINGS, AND IMPOSING 

REMEDIAL SANCTIONS AND A CEASE-

AND-DESIST ORDER 

 

I. 

 

 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 

public interest that public cease-and-desist proceedings be, and hereby are, instituted pursuant to 

Section 8A of the Securities Act of 1933 (“Securities Act”) and Section 21C of the Securities 

Exchange Act of 1934 (“Exchange Act”) against Nikola Corporation (“Nikola” or “Respondent”). 

 

II. 
 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”), which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings 

herein, except as to the Commission’s jurisdiction over it and the subject matter of these 

proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-

and-Desist Proceedings, Pursuant to Section 8A of the Securities Act of 1933 and Section 21C of 

the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and a 

Cease-and-Desist Order (“Order”), as set forth below.   

 

 

 

 

 

 



 

 2 

III. 
 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that: 

 

Summary 

 

1. Nikola, a publicly traded zero emissions transportation system provider, made 

numerous material misrepresentations to investors about key aspects of its business.  From at least 

March 2020 through September 2020, Nikola deceived investors about its products, technical 

advancements, and commercial prospects.   

 

2. Nikola primarily misled investors through scores of misrepresentations by its CEO 

and later Executive Chairman, Trevor R. Milton (“Milton”).  Before Nikola had produced a single 

commercial product or had any revenues from truck or hydrogen fuel sales, Milton embarked on a 

public relations campaign aimed at inflating and maintaining Nikola’s stock price.  As described 

further below, from at least March 2020 through September 2020, Milton’s statements in tweets 

and media appearances, individually and taken together, painted a picture of Nikola that diverged 

widely from its then-current reality. Milton misled investors about, among other things, Nikola’s 

technological advancements, in-house production capabilities, reservation book, and financial 

outlook.   

 

3. Nikola further misled investors by misrepresenting or omitting material facts about 

the refueling time of its prototype vehicles, the state of its headquarters demonstration hydrogen 

station, the anticipated cost and sources of electricity for its hydrogen production, and the 

economic risks and benefits associated with its contemplated partnership with General Motors.  In 

addition, Nikola failed to maintain disclosure controls and procedures as required by the Exchange 

Act rules for issuers with a class of securities registered under the Exchange Act. 

 

4. As a result of the conduct described above, Nikola violated Section 10(b) of the 

Exchange Act and Rules 10b-5 and 13a-15(a) thereunder and Section 17(a) of the Securities Act. 

 

Respondent 

 

5. Nikola Corporation is incorporated in Delaware and is headquartered in Phoenix, 

Arizona.  Nikola is a vertically integrated zero emissions transportation system provider that 

designs and manufactures battery electric vehicles (“BEV”), hydrogen fuel cell electric vehicles 

(“FCEV”), and hydrogen station infrastructure.  Since approximately 2016, Nikola has focused on 

producing FCEV trucks.  Later, Nikola also began to develop BEV trucks.  Nikola’s common 

stock is registered pursuant to Section 12(b) of the Exchange Act, and is quoted under the ticker 

symbol “NKLA” on the Nasdaq Global Select Market.  

 

 

 

                                                
1 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any other 

person or entity in this or any other proceeding. 



 

 3 

Relevant Person 

 

6. Trevor R. Milton is a resident of Oakley, Utah.  In 2015, he founded Bluegentech 

LLC, which in July 2017 converted from a limited liability company to a Delaware corporation 

and changed its name to Nikola Corporation (“Legacy Nikola”).  Milton was Chief Executive 

Officer (“CEO”) and Chairman of the Board of Directors of Legacy Nikola from its inception until 

June 3, 2020, when Legacy Nikola entered into the Business Combination (as defined below).  

From June 3, 2020 until September 20, 2020, Milton was Nikola’s Executive Chairman.  

According to Nikola’s filings with the Commission, Milton resigned as Executive Chairman of 

Nikola and from Nikola’s Board of Directors on September 20, 2020. 

 

Background 

 

 Nikola and its Business 

 

7. Nikola was created through the merger of Legacy Nikola and VectoIQ Acquisition 

Corp. (“VectoIQ”), a Delaware corporation headquartered in New York, New York.  VectoIQ was 

formed in January 2018 as a special purpose acquisition corporation, or SPAC, for the purpose of 

effecting a business combination with one or more businesses.  VectoIQ completed an initial 

public offering in May 2018, at which time its securities began to be quoted on The Nasdaq Capital 

Market.   

 

8. On March 2, 2020, VectoIQ and Legacy Nikola entered into a Business 

Combination Agreement (the “Business Combination Agreement”), as well as certain related 

agreements, pursuant to which Legacy Nikola would merge with a subsidiary of VectoIQ, with 

Legacy Nikola remaining as the surviving company and as a wholly-owned subsidiary of VectoIQ.  

On June 3, 2020, Legacy Nikola and VectoIQ consummated the merger contemplated by the 

Business Combination Agreement (the “Business Combination”), and VectoIQ changed its name 

to Nikola Corporation.2  On June 4, 2020, Nikola’s common stock and warrants began trading on 

the Nasdaq Global Select Market.  

 

9. Nikola advertised a business model that, among other things: (i) offered a bundled 

lease for its trucks that included the cost of hydrogen fuel; (ii) planned to construct a nationwide 

network of hydrogen refueling stations around routes of customers who have committed to lease 

Nikola’s trucks; and (iii) sought to obtain cheap electricity that would enable the company to 

produce hydrogen at a fraction of current market rates.   

 

10. Nikola’s business plan required billions of dollars of capital to finance the 

development and manufacturing of trucks and station infrastructure.  From 2015 through March 

2020, Nikola raised over $500 million through private offerings directed mostly at institutional 

investors.  In connection with the Business Combination, VectoIQ raised from institutional 

investors approximately $525 million in a private investment in public equity (“PIPE”) offering.    

As a result of the Business Combination, Nikola received a net contribution of approximately 

                                                
2 Unless specified otherwise, references in this Order to Nikola refer to, depending on the context, Legacy Nikola 

prior to the Business Combination and to Nikola Corporation after the Business Combination.  References in this 

Order to VectoIQ refer to VectoIQ prior to the Business Combination. 



 

 4 

$594.5 million from VectoIQ, an amount that excludes a $70 million payout to Milton made at the 

closing of the transaction.  

 

Relevant Securities Offerings and Filings 

 

11. In connection with the Business Combination, on March 13, 2020, VectoIQ filed 

with the Commission a Registration Statement on Form S-4, which included a Preliminary Proxy 

Statement, Prospectus, and Information Statement.  On May 8, 2020, this Registration Statement 

was declared effective and VectoIQ filed a Prospectus, a Notice of Meeting, and Proxy Statement. 

 

12. On June 15, 2020, Nikola filed with the Commission a Registration Statement on 

Form S-1 relating to (i) the issuance of Nikola common stock issuable upon the exercise of 

warrants originally issued by VectoIQ, and (ii) the offer and sale from time to time of Nikola 

common stock held primarily by the PIPE investors, VectoIQ’s sponsor, and certain of its 

affiliates.  This Registration Statement was declared effective on July 17, 2020.  On July 17, 2020, 

Nikola filed with the Commission a Registration Statement on Form S-1 relating to the offer and 

sale of Nikola common stock held by the founding shareholders of VectoIQ and by certain pre-

Business Combination investors in Nikola (including entities controlled by Milton).  This 

Registration Statement was declared effective on July 27, 2020. 

 

13. Many of Nikola’s false and misleading statements in this Order were made at the 

time securities were being offered and sold pursuant to these registration statements.   

 

Milton Aggressively Promoted Nikola  

 

14. During the time that he was CEO and then Executive Chairman, Milton was 

Nikola’s primary public spokesperson.  Milton used his personal Twitter account (@nikolatrevor) 

and personal Instagram account (@lakepowelltrevor) to publish material information about Nikola.  

When tweeting or posting material information about Nikola from his personal accounts, Milton 

did so in his capacity as CEO or Executive Chairman of Nikola.   

 

15. Beginning at least as early as June 2020 and continuing through September 20, 

2020, Milton included the following publicly available bio on his Twitter account:  “Founder, 

Executive Chairman of @nikolamotor Nasdaq traded: NKLA.  It’s our duty to leave the world a 

better place and inspire people.  Instagram: lakepowelltrevor.”  Milton also posted material 

information about Nikola from its corporate Twitter account (@nikolamotor).  Milton repeatedly 

urged television viewers and podcast listeners to follow his social media accounts, claiming he 

used them to communicate “accurate data” about Nikola in a way that would enable followers to 

receive information “way faster than you get it anywhere else.” 

 

16. In the weeks prior to and following the June 3, 2020 Business Combination, Milton 

significantly increased his media presence, appearing on dozens of nationally televised programs 

and podcasts and tweeting hundreds of times.  He told Nikola executives that his frequent media 

appearances and increased activity on social media were part of a “media blitz” designed to 

generate investor interest in Nikola, and that he hoped his presence on these platforms would 

increase and maintain the company’s stock price.   



 

 5 

Nikola Did Not Have Adequate Disclosure Controls or Procedures  

Regarding Milton’s Social Media Use and Media Appearances  

 

17. Nikola’s disclosure controls and procedures for monitoring or reviewing Milton’s 

interviews and social media activity were deficient from at least June 3, 2020 through September 

2020.   

 

18. Milton did not routinely consult with anyone at Nikola before publishing Nikola-

related information on his or Nikola’s social media accounts, or before being interviewed about 

Nikola on television programs and podcasts.  Likewise, no one at Nikola routinely reviewed 

Milton’s social media posts prior to their publication, and executives and employees alike 

frequently learned of Milton’s interviews after they aired.  Further, Nikola did not correct these 

statements. 

 

19. Nikola did not design, implement, or maintain adequate disclosure controls or 

procedures to assess whether the information Milton published via social media and television and 

podcast appearances was required to be disclosed in Nikola’s Exchange Act reports within the time 

periods specified in the Commission’s rules and forms.  Similarly, Nikola did not have processes in 

place to ensure that information published by Milton was communicated to management to allow 

timely decisions regarding required disclosure. 

 

Nikola’s Material Misrepresentations to Investors through Milton 

 

20. From approximately March 2020 through September 2020, in his capacity as CEO 

and later as Executive Chairman of Nikola, Milton made materially false and misleading 

statements on numerous critical topics related to Nikola’s capabilities, technology, reservations, 

products, and commercial prospects. 

 

21. Nikola One Capabilities.  Milton made false and misleading statements about the 

capabilities of Nikola’s first semi-truck prototype, the Nikola One, which could not run under its 

own power when Nikola unveiled it in December 2016 or at any time thereafter.  For example, in 

or around early 2018, Milton posted, or directed the posting of, a video clip to Nikola’s Twitter and 

Facebook accounts depicting the Nikola One truck moving on a road, seemingly at a high rate of 

speed.  The video had no narration or text.  The text of the tweet in which the video was embedded 

stated: “Behold, the Nikola One in motion.  Pre-production units to hit fleets in 2019 for testing.  

The Nikola Hydrogen Electric trucks will take on any semi-truck and outperform them in every 

category:  weight, acceleration, stopping, safety and features – all with 500-1,000 mile range!”  

The “In Motion” video remained posted on Nikola’s corporate Twitter, Facebook, and YouTube 

accounts, as well as on its website, and was available for viewing by investors and prospective 

investors until at least September 2020. 

 

22. The video and the caption on the January 25, 2018 tweet were misleading because 

the video showed the Nikola One moving down a road with text that told viewers to “behold” the 

Nikola One “in motion,” while omitting the fact that the truck was rolling down an incline due to 

gravity rather than under its own power.  The “In Motion” video thus left viewers with the false 

impression that the Nikola One was capable of moving under its own power. 



 

 6 

23. Hydrogen.  Milton made a series of false and misleading claims about Nikola’s 

then-current hydrogen production capabilities, its costs to produce hydrogen, and the costs at 

which it obtained electricity to produce hydrogen profitably.   

 

24. In order to support the FCEV trucks that Nikola projected to put on the road, Nikola 

would need to produce tens of millions of kilograms of hydrogen each year.  To do so, Nikola 

represented to investors that it intended to produce hydrogen via electrolysis, a process that uses 

electricity to split water into hydrogen and oxygen.  However, producing Nikola’s projected 

amount of hydrogen via electrolysis would require a significant amount of electricity.  For 

purposes of its projections, Nikola assumed it could obtain electricity at an average of $0.035 per 

kilowatt-hour (“kWh”) – a rate significantly cheaper than prevailing industrial rates – based on its 

expected large consumption and its goal of obtaining lower-cost renewable electricity during non-

peak hours or sourcing it “behind the meter” (i.e., from a source other than the grid).  Nikola 

disclosed that if it was not able to obtain electricity at a significant discount to prevailing rates, it 

would not be profitable.  Accordingly, Nikola’s ability to produce hydrogen – and do it cost-

effectively – was a critical component of the company’s overall business model. 

 

25. From approximately November 2019 through September 2020, Milton falsely 

claimed in posts from his personal Twitter account and in appearances on podcasts and television 

programs that, among other things:  (i) Nikola was then currently producing hydrogen; (ii) Nikola 

reduced its cost to produce hydrogen from $16 per kilogram down to either $3 or $4 per kilogram; 

(iii) Nikola had contracts with electricity providers at rates of $0.03 or $0.04 per kWh; and (iv) the 

electricity that Nikola purportedly had sourced was generated using renewable or “clean” methods.  

All of these statements were false and misleading, because from inception through at least 

September 2020, Nikola never produced any hydrogen, did not have a station permitted to produce 

hydrogen, and did not have any contracts signed with any electricity providers.   

 

26. Badger.  Milton falsely and repeatedly claimed that Nikola had engineered and 

already completed a prototype of an electric pickup truck, the Badger, and that this vehicle used 

primarily Nikola’s proprietary components.   

 

27. From at least February 2020 through at least June 2020, Milton misrepresented that 

Nikola had “designed” or “engineered” the Badger to meet particular specifications, and that the 

prototype had already been completed.  Milton made these statements in a Nikola press release that 

he drafted, as well as in posts from his personal Twitter account and in appearances on podcasts.  

The statements about Nikola having “designed” or “engineered” the Badger to meet particular 

specifications were false and misleading. At the time of these statements, Nikola had not 

performed any engineering work or any design work other than CGI renderings of a Nikola 

employee’s prior illustrations, and Nikola’s third-party suppliers were only completing computer-

aided design and beginning tooling.   

 

28. From at least April 2020 through September 2020, Milton also made several false 

statements in posts from his personal Twitter account and on podcast appearances regarding the 

proprietary nature of the Badger.  Milton asserted, among other things, that Nikola built the Badger 

“from the ground up,” “own[s] all the tech” and “developed all the tech” in the Badger, and that it 

“put” a “billion dollars” of its semi-truck technology into the Badger.  All of these statements were 



 

 7 

false, as third-party suppliers built the Badger prototype using “donor” vehicles manufactured by 

another company and little, if any, of Nikola’s technology was used on the Badger prototype.   

 

29. Truck Reservations.  Milton made several false claims about Nikola’s truck 

reservations and orders.  As a pre-revenue company, Nikola consistently emphasized to potential 

investors that its pre-order book, which it characterized as a “backlog of interest,” was a sign that 

the company was primed for profitability in the near future based on interest in its flagship FCEV 

semi-truck product.  Although the vast majority of the pre-orders were indications of interest that 

were cancellable at any time, Milton misrepresented the non-binding nature of these orders.  For 

example, in an appearance on a podcast on July 31, 2020, Milton stated that the pre-orders were 

“not letter of intents, they’re actually contracts. . . .  Yeah, billions and billions of dollars with 

contracts.”  This statement was false and misleading because Nikola had only one customer whose 

order for 800 FCEV trucks could be characterized as binding.  There were not billions and billions 

of dollars in binding orders. 

 

30. Similarly, Milton misrepresented the nature of the truck orders contemplated by 

Nikola’s agreement with a publicly-traded waste collection company (“Customer A”) for an order 

of 2,500 to 5,000 trucks.  For example, Milton claimed on his personal Twitter account that this 

was the “[l]argest class 8 zero emission order in the industry 2,500 guaranteed.”  This statement 

was false and misleading, as under the terms of the agreement, for Customer A to incur any 

obligation, a series of conditions would have to be met, not all of which were even under Nikola’s 

control.  Moreover, if the parties could not agree on essential terms (including price, service and 

parts network, warranties, training program, and more), Customer A had the ability to terminate the 

agreement anytime on 30 days’ notice.  Finally, even if Nikola could meet all of those obligations, 

Customer A still had the right to cancel its orders without liability or penalty as long as the delivery 

date was at least 120 days out.   

 

31. “Breakthrough” Battery Technology.  Milton claimed falsely that Nikola “has 

achieved” a significant breakthrough in battery technology that would result in enormous 

performance gains for Nikola’s vehicles.  Milton made this claim in a November 19, 2019 press 

release that he drafted and Nikola published.  The press release contained several unqualified 

claims relating to the “new battery,” including, among others, vehicle range, energy density, 

number of cycles, and weight.  In the days and months following the publication of the press 

release, Milton made similar statements in tweets from his personal account and in appearances on 

podcasts.  These statements were misleading because they failed to disclose that the claimed 

battery attributes were applicable to coin-size battery cells that were being developed and tested in 

a controlled lab environment as part of a university research project.  This fact was significant 

because to scale these coin-size lab-level cells to even a prototype size would require further 

development with no assurance of comparable performance levels.  From there, developing the 

cells from prototype cells to commercial grade quality was a further, significant undertaking, with 

no assurance of utility for commercial applications. 

 

32. In-House Component Development.  Milton made numerous misstatements about 

Nikola’s in-house component development and manufacturing capabilities.  For example, from 

approximately February 2020 through at least August 2020, Milton made statements in posts from 

his personal Twitter account and in appearances on podcasts that created the misleading impression 



 

 8 

that Nikola manufactured its own batteries and that Nikola designed the entire battery.  These 

statements were false and misleading because Nikola used a third-party supplier to manufacture 

batteries for its first production vehicle, and this supplier both designed the modules for the 

batteries and provided Nikola assistance in the design of the battery pack.  Further, Nikola lacked 

the capability to manufacture these batteries on its own.  Similarly, during the same time period, 

Milton claimed in tweets and on podcast appearances that Nikola designed its own inverter.  This 

statement was false because Nikola used “off the shelf” inverters for all of its semi-truck 

prototypes and it planned to use “off the shelf” inverters for its first production vehicle. Finally, 

Milton misled investors when he stated in an Instagram Live video posted from his personal 

Instagram account that Nikola “does full electric fluid submersion batteries” that “cool and heat . . . 

much faster, much more efficiently,” and are “able to stop thermal propagation.”  This statement 

was misleading because it omitted to disclose that the submerged batteries to which Milton was 

referring were only being used in two truck prototypes and had severe functional limitations and 

associated safety issues.  Milton’s statements misled current and prospective investors to believe 

that these batteries were viable when, in fact, they were not. 

 

33. Total Cost of Ownership.  Finally, Milton also falsely claimed that the total cost of 

ownership (“TCO”) of Nikola’s trucks was 20 to 30 percent below that of diesel vehicles.  

Commercial vehicle buying decisions, particularly for large corporate fleets, are driven, in part, by 

the TCO, an analysis of the lifetime cost of a truck, from the acquisition through the operating 

period.  By March 2019, Nikola had determined it could not project a TCO that was below that of 

diesel vehicles, and that its analysis of data could only support a projected TCO on par with diesel.  

However, on at least several occasions in July 2020, including during podcast appearances and in 

an Instagram Live video posted from his personal Instagram account, Milton falsely asserted that 

the TCO of Nikola’s vehicles was “20 to 30 percent” cheaper than of diesel competitors.   

 

34. In making the false and misleading statements described above, Milton at all times 

spoke in his capacity as CEO or Executive Chairman of Nikola. 

 

Nikola’s Additional Material Misrepresentations 

35. In addition to the material misrepresentations that Nikola made through Milton, as 

described above, Nikola made other material misrepresentations to investors.  These 

misrepresentations concerned hydrogen refueling time, the hydrogen demonstration station, the 

current and future costs and sources of electricity for the company’s planned hydrogen production, 

and the economic risks and benefits associated with its contemplated partnership with General 

Motors. 

 

36. Refueling Time.  Nikola presented a misleading picture of its hydrogen refueling 

capabilities.  Nikola understood that the ability to refuel FCEV trucks approximately as quickly as 

diesel trucks (10-15 minutes on average) was an important factor in achieving market adoption of 

FCEV technology.  However, hydrogen’s properties make it challenging to rapidly fill the tanks of 

a semi-truck.  Completing a refueling this quickly – known as a “fast fill” – requires, among other 

things, cooling and compression as part of the fueling process.  Although Nikola had an 

engineering plan and had run simulations that showed it was theoretically possible to conduct a fast 

fill in 20 minutes, it had not developed a solution to achieve a fast fill on a semi-truck.  Instead, it 



 

 9 

took Nikola 45-80 minutes to fill its semi-truck prototypes with hydrogen in 2020.  However, after 

the Business Combination announcement, Nikola failed to disclose to the market the actual fill 

time of 45-80 minutes to investors.  For example, in an April 2020 investor presentation Nikola 

prepared and provided to investors, Nikola stated, without qualification, that the refueling time for 

its FCEV was “10-15 minutes.”  Nikola’s executives similarly claimed in 2020 that Nikola’s 

FCEV refueling time compared favorably with diesel trucks. 

 

37. Hydrogen Station.  Nikola misled investors in 2020 regarding the status of its 

demonstration hydrogen station.  Although Nikola was not producing hydrogen in 2020, it had 

installed a station at its headquarters designed to dispense test quantities of hydrogen it purchased 

from third parties.  In its Registration Statement on Form S-1, filed on June 15, 2020, as well as in 

certain subsequent Registration Statements and Prospectuses filed in 2020, Nikola touted the 

demonstration station at its headquarters as a “as a model for future hydrogen stations.”   This 

statement was misleading because Nikola failed to disclose that this station was beset by 

significant operational and repair challenges.  Nikola’s analysis showed that the station operated 

only 21% of the time during 2020. 

 

38. Electricity.  Nikola made material omissions about costs and sources for electricity 

related to the company’s planned hydrogen production – a critical component of its business 

model.  In its Registration Statement on Form S-1, filed on June 15, 2020, as well as in certain 

subsequent Registration Statements and Prospectuses filed in 2020, Nikola disclosed that: (i) for its 

hydrogen production, “electricity costs account for approximately 75% to 85% of the total cost”; 

(ii) securing a reliable source of electricity for each of its fueling stations at a price per kwh below 

market retail rates was critical to its business model; (iii) it planned to produce hydrogen on-site at 

each hydrogen station; (iv) parties have been able to secure “Power Purchase Agreements” (or 

“PPAs”) using solar energy at below market rates; and (v) the costs of energy production using 

solar and wind have been decreasing over time. 

 

39. Certain of Nikola’s statements regarding the cost and sources of electricity for its 

on-site hydrogen production were misleading.  Although it accurately highlighted its need to obtain 

a reliable source of electricity for its fueling stations, Nikola omitted to disclose that it would 

require up to approximately 5% of all electricity consumed in the United States in 2019 to produce 

sufficient hydrogen per year for the fully-deployed version of its planned hydrogen 

network.  Furthermore, although Nikola included some data about decreasing solar and wind 

electricity cost trends, it failed to disclose that its planned on-site hydrogen production would 

require Nikola to incur material additional costs beyond just the cost of electricity production, 

including, among other things, transmission, distribution, and energy storage costs.  Moreover, in 

conjunction with its representations about needing to obtain below market retail rates, Nikola 

omitted that in the months prior to its S-1 filing it received significantly higher per kWh price 

indications from grid and solar energy suppliers than its target price point (which were primarily 

driven by, among other factors, battery storage costs and grid connection, transmission, or 

distribution costs). 

 

40. The General Motors Partnership.  Nikola misled investors by failing to disclose the 

potential economic impact of the proposed strategic partnership between Nikola and General 

Motors, pursuant to which General Motors would produce the Badger.  In a press release dated 



 

 10 

September 8, 2020 Nikola disclosed the strategic partnership with General Motors to develop the 

Badger and touted the purported cost-savings to Nikola from the partnership.  Specifically, Nikola 

claimed that it “anticipates saving over $4 billion in battery and powertrain costs over 10 years and 

over $1 billion in engineering and validation costs.”  This claim was misleading because, although 

Nikola touted potential cost savings, Nikola failed to disclose that unless the market could support 

a “premium” MSRP price for the Badger, Nikola’s internal projections showed that the entire 

Badger program could potentially generate a net loss of $3.1 billion over six years and threaten 

Nikola’s solvency.  A Nikola executive prepared these internal projections and provided them to 

Nikola’s senior executives and its Board, noting that the projected unit economics from both the 

“premium” and “market based” pricing approaches.  Nevertheless, Nikola went on to tout the 

discrete potential cost savings associated with one aspect of the program without disclosing the 

program’s overall potential financial impact. 

 

Violations 

 

41. As a result of the conduct described above, Nikola violated Section 10(b) of the 

Exchange Act and Rule 10b-5 thereunder, which prohibit any person from directly or indirectly in 

connection with the purchase or sale of securities knowingly or recklessly employing devices, 

schemes and artifices to defraud, making untrue statements of material facts, or omitting to state 

material facts necessary in order to make the statements made, in light of the circumstances under 

which they were made, not misleading, and engaging in acts, practices, and courses of business 

that operate as a fraud or deceit.   

 

42. In addition, as a result of the conduct described above, Nikola violated Section 

17(a) of the Securities Act, which prohibits, in the offer or sale of any securities, the employment 

of any device, scheme, or artifice to defraud, and further prohibits any person from directly or 

indirectly obtaining money or property by means of any untrue statement of a material fact or any 

omission to state a material fact necessary in order to make the statements made, in light of the 

circumstances under which they were made, not misleading, or engaging in any transaction, 

practice, or course of business which operates or would operate as a fraud or deceit upon the 

purchaser. 

 

43. In addition, as a result of the conduct described above, Nikola violated Rule 13a-

15(a) under the Exchange Act.  Rule 13a-15(a) requires issuers required to file annual reports 

pursuant to Section 13(a) or 15(d) of the Exchange Act to, among other things, maintain disclosure 

controls and procedures designed to ensure that information required to be disclosed by the issuer 

in the reports that it files or submits under the Exchange Act is recorded, processed, summarized 

and reported, within the time periods specified in the Commission’s rules and forms. 

 

Nikola’s Remedial Efforts and Cooperation 

 

44. In determining to accept the Offer, the Commission considered remedial acts 

undertaken by Respondent and cooperation afforded the Commission staff. 

 

 

 



 

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Undertakings 

 

45. Nikola (including its officers, directors, and employees, and third-party consultants 

within Nikola’s control) shall continue to cooperate fully with the Commission with respect to this 

action and any related judicial or administrative proceeding or investigation commenced by the 

Commission or to which the Commission is a party and subject to compliance with applicable law.  

Nikola agrees that such cooperation shall include, but is not limited to:  

 

a. Production of Information: at the Commission’s request, upon reasonable 

notice, and without subpoena, Nikola (including its officers, directors, and employees, and 

third-party consultants within Nikola’s control) shall truthfully and completely disclose all 

information in its possession requested by the Commission staff in connection with the 

Commission’s investigation, litigation or other related proceedings;  

 

b. Production of Documents: at the Commission’s request, upon reasonable 

notice, and without subpoena, Nikola (including its officers, directors, and employees, and 

third-party consultants within Nikola’s control) shall provide any document, record or 

other tangible evidence in its possession requested by the Commission staff in connection 

with the Commission’s investigation, litigation or other related proceedings;  

 

c. Production of Cooperative Personnel: at the Commission’s request, upon 

reasonable notice, and without subpoena, Nikola (including its officers, directors, and 

employees, and third-party consultants within Nikola’s control) shall secure the attendance 

and truthful statements, deposition, or testimony of any Nikola officer, director, or 

employee or third-party consultant within Nikola’s control, excluding any person who is a 

party to any related litigated judicial or administrative proceeding, at any meeting, 

interview, testimony, deposition, trial, or other legal proceeding.  Nikola shall also use its 

best efforts to secure the attendance and truthful statements, deposition, or testimony of 

any former Nikola officer, director, or employee, excluding any person who is a party to 

any related litigated judicial or administrative proceeding, at any meeting, interview, 

testimony, deposition, trial, or other legal proceeding. 

 

The foregoing obligations are subject to Nikola’s reservation of rights: (i) to claim 

that documents or information requested is subject to attorney-client privilege, attorney-

work-product protection, or bank examiner privilege; and (ii) to seek entry of a 

confidentiality order as to: sensitive business documents or information; sensitive personnel 

documents or information; or confidential information pertaining to parties other than 

Nikola; and 

 

d. Service and Personal Jurisdiction Consents: Nikola further agrees that, with 

respect to this action and any related judicial or administrative proceeding or investigation 

commenced by the Commission or to which the Commission is a party, it will: (i) accept 

service by email, mail or facsimile transmission of notices, requests, or subpoenas issued 

by the Commission for documents or testimony at depositions, hearings, or trials, or in 

connection with any related investigation by the Commission staff (“Commission 

Service”); (ii) appoint Nikola’s attorney as agent to receive Commission Service; (iii) with 



 

 12 

respect to Commission Service, waive the territorial limits upon service contained in Rule 

45 for the Federal Rules of Civil Procedure and any applicable local rules, provided that 

the party requesting the testimony reimburses Nikola’s travel, lodging, and subsistence 18 

expenses at the then-prevailing U.S. Government per diem rates; and (iv) consent to 

personal jurisdiction over Nikola in any United States District Court for purposes of 

enforcing any Commission Service. 

 

IV. 

 

In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent’s Offer.  

 

Accordingly, pursuant to Section 8A of the Securities Act and Section 21C of the Exchange 

Act, it is hereby ORDERED that:  

 

A. Respondent Nikola cease and desist from committing or causing any violations and 

any future violations of Section 10(b) of the Exchange Act and Rules 10b-5 and 13a-15(a) 

thereunder, and Section 17(a) of the Securities Act.  

 

B. Respondent shall pay a civil money penalty in the amount of $125,000,000 to the 

Securities and Exchange Commission.  Payments shall be applied first to post order interest, which 

accrues pursuant to pursuant to 31 U.S.C. 3717.  Prior to making the final payment set forth herein, 

Respondent shall contact the staff of the Commission for the amount due.  If Respondent fails to 

make any payment by the date agreed and/or in the amount agreed according to the schedule set 

forth below, all outstanding payments under this Order, including post-order interest, minus any 

payments made, shall become due and payable immediately at the discretion of the staff of the 

Commission without further application to the Commission.  Payment shall be made in the 

following installments: 

 

 Due within 14 days of the entry of this Order:  $25,000,000 (the “Initial 

Payment”) 

 Due 184 days after the entry of this Order:  $25,000,000  

 Due 364 days after the entry of this Order:  $25,000,000  

 Due 544 days after the entry of this Order:  $25,000,000 

 Due 724 days after the entry of this Order:  $25,000,000  

 

Payment must be made in one of the following ways:  

 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;  

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 



 

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(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

 

Enterprise Services Center  

Accounts Receivable Branch  

HQ Bldg., Room 181, AMZ-341  

6500 South MacArthur Boulevard  

Oklahoma City, OK 73169  

 

Payments by check or money order must be accompanied by a cover letter identifying 

Nikola as a Respondent in these proceedings, and the file number of these proceedings; a copy of 

the cover letter and check or money order must be sent to Eric Werner, Associate Director, 

Division of Enforcement, Securities and Exchange Commission, 801 Cherry Street, Suite 1900, 

Fort Worth, Texas 76102. 

 

C. Pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, a Fair Fund is created 

for the penalties referenced in paragraph IV.B. above.  Amounts ordered to be paid as civil money 

penalties pursuant to this Order shall be treated as penalties paid to the government for all 

purposes, including all tax purposes. To preserve the deterrent effect of the civil penalty, 

Respondent agrees that in any Related Investor Action, Respondent shall not argue that 

Respondent is entitled to, nor shall Respondent benefit by, offset or reduction of any award of 

compensatory damages by the amount of any part of Respondent’s payments of a civil penalty in 

this action (“Penalty Offset”). If the court in any Related Investor Action grants such a Penalty 

Offset, Respondent agrees that Respondent shall, within 30 days after entry of a final order 

granting the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of 

the Penalty Offset to the Securities and Exchange Commission. Such a payment shall not be 

deemed an additional civil penalty and shall not be deemed to change the amount of the civil 

penalty imposed in this proceeding. For purposes of this paragraph, a “Related Investor Action” 

means a private damages action brought against Respondent by or on behalf of one or more 

investors based on substantially the same facts as alleged in the Order instituted by the 

Commission in this proceeding.  

 

 

By the Commission. 

 

 

 

        Vanessa A. Countryman 

        Secretary