• Market Crumbs

Nikola Accused Of Buying Vehicle Designs


Image via Kelly Sikkema on Unsplash

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.

Leftover Crumbs

  • William Hill receives buyout offer. British betting company William Hill has received takeover offers from both buyout firm Apollo and casino operator Caesars Entertainment. "Following an initial written proposal from Apollo on 27 August 2020, William Hill received a further proposal from Apollo and proposals from Caesars," William Hill said. Both suitors have until October 23 to either announce a firm intention to make an offer or walk away.

  • London gains on NYC. According to the latest Global Financial Centers Index city rankings, London is quickly gaining on New York City as the top global financial hub. The top two spots are unchanged since the last survey in March, but London's score, which is based on financial, social and economic metrics, gained 24 points to 766 while NYC's increased by one point to 770. Shanghai, Tokyo and Hong Kong were the other cities to round out the top five.

  • FAA chief prepares for flight. U.S. Federal Aviation Administration administrator Steve Dickson will take a flight on the Boeing 737 MAX this week as the regulator continues to evaluate the airplane to resume flights. Dickson is a former pilot and will undergo simulator training before the flight. The 737 MAX has been grounded since March 2019 following a pair of fatal crashes that killed 346 people. Dickson previously said he wouldn't approve the airplane until after he flies it and is "satisfied that I would put my own family on it without a second thought."

  • American Airlines secures loan. American Airlines has secured a $5.5 billion loan from the U.S. government as part of the CARES Act coronavirus relief bill passed by Congress in March. American Airlines was originally set to receive $4.75 billion but will receive additional funds as carriers such as Delta Air Lines and Southwest Airlines declined to take government loans. Depending on how many other airlines take government loans, American said it could potentially be awarded $2 billion more.

  • WeWork sells stake in China business. WeWork has sold a majority stake in WeWork China to Trustbridge Partners for $200 million. The deal comes at a steep decline from the $5 billion WeWork China was valued at in 2018. Trustbridge Partners operating partner Michael Jiang has been appointed acting CEO of WeWork China. WeWork China currently has more than 100 locations across 12 cities.