Nikola Accused Of Buying Vehicle Designs
Just a few weeks ago everything was seemingly going well for electric vehicle maker Nikola as they announced a strategic partnership with General Motors.
Shortly thereafter, Nikola was accused of being a fraud by Hindenburg Research who said it's "an intricate fraud built on dozens of lies over the course of its founder and executive chairman Trevor Milton's career."
The accusations have since put Nikola in the spotlight, leading to Milton leaving the company, the U.S. Securities and Exchange Commission and the Department of Justice launching investigations, and BP walking away from a partnership to develop Hydrogen Refueling Stations for Nikola's trucks.
The latest hit against Nikola is now that Milton allegedly purchased the designs for the Nikola One from Adriano Mudri, a designer based in Croatia. Sources told the Financial Times that Milton was in Croatia visiting electric vehicle maker Rimac when he met with Mudri. The allegations contradict Nikola's claim that Milton designed the company's flagship product "in his basement."
"The Nikola One truck was designed and patented by Nikola," Nikola said "It is commonplace to license third party designs during vehicle development, and although early in the process Nikola purchased a license to Antonio Mudri's designs, he was not part of the design team and his designs are materially different from the design invented by Nikola for the Nikola One."
The allegations also surfaced in a lawsuit between Nikola and its rival Tesla. Nikola claims Milton began designing the vehicle in 2013 and that Tesla infringed on its patents. Nikola said Milton then hired designer Steve Jennes in 2015 after being unhappy with the designs. The two then spent "several million dollars developing the Nikola One," according to the lawsuit.
A rebuttal by Tesla filed last week said Nikola can't protect the designs because they weren't designed by Milton, but rather by Mudri with the vehicle named the "Road Runner." However, Tesla's rebuttal didn't include details of money being exchanged and other details of the transaction or that Milton arranged it.
"Trevor Milton chose not to disclose the Road Runner concept truck to the [U.S. Patent and Trademark Office] with deceptive intent," Tesla said.
Shares of Nikola have now fallen more than 60% from the highs following the news of the GM partnership a few weeks ago and nearly 80% from their high in June.
As the Nikola story continues to unfold, the company still has a market capitalization of more than $7 billion despite virtually zero revenues.
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