Deconstructing Nikola: A Look Back at the Hindenburg Exposé That Changed Everything

Introduction

In a recent explosive interview with Tucker Carlson, Trevor Milton, founder of Nikola Corporation and recipient of a presidential pardon, made sweeping allegations about short sellers, federal prosecutors, and media organizations that he claims conspired to destroy his company and send him to prison.

https://www.youtube.com/watch?v=gMbacDpXoWI

Milton's interview has reignited debate about activist short selling and raised serious questions about market integrity. But before we examine those broader implications in our upcoming series, let's take a step back and revisit what actually happened four years ago when Hindenburg Research published the report that brought down a billion dollar company.

On September 10, 2020, Hindenburg Research released "Nikola: How to Parlay An Ocean of Lies Into a Partnership With the Largest Auto OEM in America", a 76-page exposé that would trigger one of the most dramatic corporate collapses in recent memory. The timing was devastating: just two days after Nikola announced a blockbuster partnership with General Motors. By the end of September 2020 the stock had dropped over 50% and it never truly rebounded.

This is the story of that report, what it revealed, and how it unraveled Trevor Milton's hydrogen truck empire.

The Company Hindenburg Targeted

Before the report, Nikola Corporation appeared to be the next Tesla. Founded by Trevor Milton in his Salt Lake City basement, the company promised to revolutionize heavy-duty trucking through hydrogen fuel cell technology. By September 2020, Nikola boasted a market capitalization approaching $20 billion despite having virtually no revenue.

Milton positioned himself as a visionary entrepreneur capable of rivaling Elon Musk. The company claimed breakthrough technology in:

• Zero-emission hydrogen trucks
• Revolutionary battery systems
• Proprietary hydrogen production capabilities
• A planned network of 700 hydrogen fueling stations

The September 8, 2020 GM partnership seemed to validate everything. General Motors—one of the world's largest automakers—agreed to take an 11% stake in Nikola and help manufacture their trucks. The market responded enthusiastically, driving both companies' stock prices higher.

Then Hindenburg Research struck.

The Devastating Exposé

"An Ocean of Lies"

Hindenburg's report opened with a stark accusation: Nikola was "an intricate fraud built on dozens of lies over the course of its founder Trevor Milton's career." The firm claimed to have conducted extensive research involving "multiple whistleblowers, business partners, and former employees" as well as reviewing "extensive internal documentation."

The report's central thesis was that Milton had...

"established an undeniable track record of taking from others and claiming technology as his own" while "repeatedly mislead[ing] customers, partners, and investors."

The "Nikola One in Motion" Deception

Perhaps the most damaging revelation concerned Nikola's promotional video showing their prototype truck apparently driving at highway speeds. Hindenburg's investigation revealed the shocking truth:

The company had scouted a remote section of road on the Mormon Trail near Grantsville, Utah—a 2-mile stretch with a consistent 3% downhill grade. Rather than driving under its own power, the truck was simply towed to the top of the hill and allowed to roll down, reaching speeds of 56 mph through gravity alone.

An investigator dispatched to the exact location confirmed this by rolling an SUV down the same hill, achieving similar speeds and distance.

This contradicted Milton's repeated public statements that the truck was "fully functioning" and "not a pusher."

The December 2016 Launch Event Lies

Hindenburg documented extensive evidence that Milton's December 2016 launch event was built on deception. Despite telling the audience multiple times that the Nikola One was "fully functioning," internal evidence showed:

• The truck was missing critical components including motor cores and gears
• Natural gas turbines were installed despite hydrogen branding on the exterior
• The vehicle was powered by a cable snaked up from under the stage to run the cabin displays
• The "functioning" screens contained largely static webpages loaded the day before

Former employees described a frantic rush to make the prototype look presentable, with emails instructing workers to "get exposed wiring looking as nice as it can."

A Pattern of Deception

The report traced Milton's history of questionable business practices:

St. George Security and Alarms: Milton claimed to have sold this company for "almost two million dollars." The actual buyer told Hindenburg he paid $300,000 upfront, realized the business wasn't as portrayed, and took a complete loss.

uPillar.com: Milton claimed this classified ads website was "beating Amazon" with 80 million monthly users. A former employee called this "absurd," describing a low-traffic site that primarily dealt with overseas scammers.

dHybrid Systems: Multiple lawsuits alleged misrepresentations and capital misappropriation. Worthington Industries, which acquired the company, later recorded significant impairments related to the deal.

Technology That Didn't Exist

Hindenburg revealed that Nikola's supposed breakthrough technologies were largely fabricated:

Hydrogen Production: Despite claims of producing 1,000 kilograms of hydrogen daily at their Phoenix headquarters, Milton later admitted to producing "no hydrogen at all."

Battery Technology: The much-hyped "game-changing" battery acquisition turned out to be from ZapGo Ltd., whose president had been indicted for tax fraud and allegedly used NASA funds to hire prostitutes. The deal was quietly terminated.

Proprietary Components: Items Milton claimed were developed in-house were actually off-the-shelf products from suppliers like Cascadia Motion, with labels covered by masking tape during demonstrations.

Family Nepotism

The report exposed questionable hiring practices, including Milton's brother Travis as "Director of Hydrogen Production/Infrastructure." Travis's previous experience? Pouring concrete driveways in Hawaii and applying epoxy flakes to staircases.

The Immediate Aftermath

Market Collapse

Nikola's stock price plummeted 14% at a clos report's release, wiping out billions in market value. The company's credibility was shattered, and investor confidence evaporated.

Milton's Response

Rather than addressing the specific allegations with evidence, Milton took to Twitter with vague denials and threats of litigation. He promised to respond in "a few hours" with proof that would vindicate the company. That detailed response never materialized.

Federal Investigation

Within days of the report's publication, federal prosecutors opened an investigation. Milton would later claim this timing was no coincidence, alleging coordination between Hindenburg and the Department of Justice, a central claim in his recent Tucker Carlson interview.

The GM Deal Unravels

The September 2020 GM partnership, initially seen as validation of Nikola's technology, began to look different in light of Hindenburg's revelations. The deal structure was notably favorable to GM:

• GM received $2 billion in Nikola stock for "non-cash contributions"
• GM would provide the actual engineering, manufacturing, and battery technology
• GM could begin selling shares before any trucks were produced
• GM retained 80% of federal EV tax credits

As Hindenburg noted:

"Essentially, it's a free call option in a 'sexy' EV story for General Motors"

The partnership effectively admitted that Nikola's supposed proprietary technology didn't exist, GM would provide everything from batteries to manufacturing capabilities.

Milton's Downfall

Resignation and Charges

By September 20, 2020, just ten days after the Hindenburg report, Milton resigned as executive chairman. Federal prosecutors eventually indicted him on securities fraud charges related to his public statements about the company.

The Trial and Conviction

Milton was convicted in October 2022 on three counts of fraud for misleading investors about Nikola's capabilities. He was sentenced to four years in prison, though he would ultimately serve none of it due to his presidential pardon.

The Presidential Pardon

In March 2025, President Trump granted Milton a full and unconditional pardon, just days before the government was set to seize $690 million in assets. Milton claims Trump told him: "What they did to you was evil and disgusting. You don't deserve what you've been through."

Looking Back at Hindenburg's Methods

The Investigation

Hindenburg's report demonstrated extensive investigative work:

• Site visits to filming locations
• Interviews with former employees and business partners
• Review of court documents and SEC filings
• Analysis of technical claims and patents
• Financial analysis of partnerships and deals

The Evidence

The firm provided substantial documentation including:

• Photographs of incomplete prototypes
• Court documents from previous lawsuits
• Email exchanges with suppliers
• Technical specifications of supposedly "proprietary" components
• Financial records showing actual deal terms

The Disclosure

Hindenburg was transparent about their financial position, clearly stating they had taken a short position in Nikola stock and would profit if the price declined. This disclosure, while legally required, would later become central to Milton's claims of market manipulation.

The Report's Impact

Immediate Market Effects

• Nikola's stock fell from over 50% in the month of September 2020.
• Market capitalization dropped from $20+ billion to under $5 billion
• The broader EV sector faced increased scrutiny
• Investor confidence in SPAC deals (like Nikola's) declined

Regulatory Consequences

• SEC investigation into Nikola's disclosures
• Congressional hearings on SPAC regulations
• Increased scrutiny of EV startup claims
• New guidelines for promotional videos and demonstrations

Industry Impact

The Nikola collapse had broader implications:

• Increased due diligence requirements for EV investments
• Greater skepticism of hydrogen technology claims
• More rigorous vetting of startup partnerships by established automakers
• Enhanced disclosure requirements for promotional materials

Conclusion: The Report That Changed Everything

Four years later, Hindenberg's Nikola report stands as one of the most consequential pieces of financial investigative journalism in recent memory. Whether viewed as legitimate research exposing fraud or as a coordinated attack by short sellers (as Milton now claims), its impact was undeniable.

The report demonstrated the power of detailed investigative work to expose corporate deception. It also raised questions about the role of activist short sellers in markets and their relationship with media and regulatory authorities, questions that have only intensified following Milton's recent interview.

In upcoming articles, we plan to examine Milton's and Carlson's specific allegations about coordination between Hindenburg, federal prosecutors, and media organizations. We'll analyze their claims about prosecutorial misconduct, jury bias, short selling as market manipulation, activist short selling as a threat to American capitalism, media corruption by financial interests, and the broader implications for how financial crimes are investigated and prosecuted in America.

The Nikola story is far from over. If Milton's recent allegations prove true, they could reshape our understanding of how markets, media, and law enforcement interact. But first, it's worth remembering how we got here, with a startup founder's promises, a short seller's investigation, and a $34 billion company that vanished almost overnight.

This is the first in our series examining the Nikola case and its broader implications for activist short selling, market regulation, and prosecutorial conduct. Stay tuned for our analysis of Trevor Milton's and Tucker Carlson's recent allegations and what they mean for market integrity.