By Jeramiah Woods
Last week was quite eventful for Nikola Motors, a recently trending EV company. Their company thus far has shown some promise in respects to their semi truck models and pickup truck concept, especially with the rise of stock due to General Motors’ $2 billion investment. Unfortunately, Nikola’s apparent success was ultimately short-lived, as short seller Hindenburg Research filed a report last Thursday, accusing them of deceiving investors and exaggerating the capabilities of their vehicles.
Following this report, their stocks plummeted nearly 10%, albeit expectedly, as they are new to the EV market. To add more fuel to the fire, Nikola addressed the allegations of the legitimacy of their semi-trucks’ functionality, as they admitted to the fact that they had rolled their truck down a hill (as seen in a promotional video dubbed ‘Nikola One Electric Semi Truck In Motion’) rather than presenting its literal functionality. They issued an explanation as to why this particular accusation was not entirely false, stating the following: “Nikola never stated its truck (the Nikola One) was driving under its own propulsion in the video,” and that their semi-truck was actually designed to do exactly what it was supposed to, though it is not shown within the video.
Such claims, as given by Hindenburg, can quickly tarnish the image of a company, as well as future prospects. Founder of Nikola, Trevor Milton, tweeted Nikola’s formal counter in response to Hindenburg’s report, stating that “this was a hit job for short sale profit driven by greed,” which could be considered a moot statement with the current uncertainty looming. However, Nikola is standing firm on their reputability, as they plan to cooperate with the U.S. Securities and Exchange Commission in order to put a stop to Hindenburg’s “salacious accusations” and alleged false report. Ultimately, they have stated that they are committed to properly delivering on the expectations of their stakeholders, which is most likely the best promise current investors can utilize to prolong their faith and trust within the company, as of now.
Rather than primarily focusing on their stock prices, it is within Nikola’s best interest to start delivering on their claims as soon as possible in order to erase all doubt and suspicion from their name regarding their technology, production and manufacturing status.