Is Zero-emission Truck Maker Nikola The New Tesla, Or Just Hot Air?

With its electric and hydrogen-fueled trucks,the firm Nikola aimed to revolutionize the future of the transportation sector. But with one investor claiming the group is running on empty, it has been having a rollercoaster ride on the stock exchange for the past week

New York (UrduPoint / Pakistan Point News - 15th Sep, 2020 ) :With its electric and hydrogen-fueled trucks,the firm Nikola aimed to revolutionize the future of the transportation sector. But with one investor claiming the group is running on empty, it has been having a rollercoaster ride on the stock exchange for the past week.

Founded in 2015 by Trevor Milton, the company is mainly working on the development of trucks and pick-ups powered by electric batteries or hydrogen fuel cells, as well as building out hydrogen recharging stations.

Although it has not yet built anything, it has forged strategic partnerships with several renowned industrial groups including the German engineering giant Bosch, the Italians CNH Industrial and, most recently, US car-maker General Motors.

The announcement of the latter partnership on September 8 caused shares to leap 41 percent on the New York Stock Exchange, where the group was floated in June via a merger with a company called VectoIQ, founded by a former senior executive at GM.

Like Tesla, Nikola has benefited on Wall Street from investor infatuation with electric vehicles, considered to be the future of the automobile.

But the investment company Hindenburg Research published a report on September 10 accusing the start-up of "intricate fraud" based on multiple lies by the company's founder Milton, who it said "misled partners into signing agreements by falsely claiming to have extensive proprietary technology." That announcement triggered a plummet in share value, with stock diving 36 percent in three days.

Nikola immediately rejected the charges before issuing a more weighty statement of denial on Monday.

The group said it had been in touch with the Securities and Exchange Commission about the report, which it said was aimed at manipulating its share value, which climbed back 11 percent on Wall Street Monday.