No one requested another installment of the soap opera highlighting Nikola Corp. NKLA and its mired founder, Trevor Milton. Yet, we find ourselves stuck in this melodramatic loop.
Off to Legal Drama We Go
Previously in the Nikola Corp. saga, the fuel cell truck and hydrogen fuel distribution company faced hurdles in recovering a $167.7 million arbitration award in November. Subsequently, Milton, the convicted founder, sought to overturn this decision in January.
Recent developments saw Nikola suing Milton in the U.S. District Court for the District of Arizona, pursuing a temporary restraining order (TRO) under the Arizona Uniform Fraudulent Transfer Act to block Milton from selling his company stock until the arbitration award was fulfilled.
Court Denies Nikola Request
The court in Phoenix dismissed Nikola’s plea for a TRO, citing lack of evidence and doubts about the company’s ability to substantiate its claims. However, it compelled Milton to clarify his actions regarding the sale of over 37 million Nikola shares through his M&M Residual LLC between Feb. 22 and March 13.
This reduced Milton’s Nikola holdings to slightly under 13.3 million shares, a significant decrease from his previous worth of billions on paper.
Nikola alleged that Milton was deliberately impeding the company’s efforts to collect the arbitration award through his actions.
Approximately half of the arbitration award, amounting to $83.3 million, aimed to cover the unpaid segment of a $125 million Securities and Exchange Commission sanction imposed on Nikola in 2021 following Milton’s misleading statements regarding the company’s technological advancements.
Allegations of Vote Buying
Nikola suggested that Milton might have distributed shares to existing shareholders to bolster the support for five candidates he endorsed for Nikola’s board of directors. The nominees prompted Nikola to issue a preemptive news release urging shareholders to oppose their election.
Nikola denounced the nominees, stating that they lacked public company experience and valuable skills or expertise that could benefit the board, contrary to the current board members’ knowledge and depth of experience.
Nikola Responds in SEC Filing
In a recent filing with the Securities and Exchange Commission, Nikola criticized its disgraced founder, labeled a convicted felon, for attempting a takeover by collaborating with buyers of Nikola assets, notably the scrapped Badger electric pickup truck after a deal with General Motors fell through.
When Nikola sold off the Badger and Powersports assets to EMBR, a firm primarily owned by Dave Sparks (also known as “Heavy D”) and attorney Cole Cannon, stipulations forbade Milton’s involvement due to the damage caused to Nikola’s reputation and operations. Sparks and Cannon now stand as two of Milton’s board nominees.
Legal action is being pursued against EMBR, Mr. Cannon, Mr. Sparks, and Mr. Milton for violating the agreement, as evident from their social media activity and SEC disclosures.
Currently owning around 4% of Nikola shares, Milton faces a potential four-year imprisonment following his October 2022 conviction for securities and wire fraud. Despite appealing the sentence, no surrender date has been set.
Recalled Trucks Returned to Customers
Amidst the chaos surrounding Milton and the looming delisting threat, Nikola is fulfilling its commitment to reclaim and return recalled fire-risk battery-electric vehicles (BEVs) to customers.
In August, Nikola recalled 209 Tre BEVs following battery fires in three trucks, leading to their return to the Coolidge, Arizona plant for necessary repairs. The battery packs, sourced from Romeo Power, a subsidiary acquired by Nikola in dire financial straits, were replaced with packs possibly from China’s Contemporary Amperex Technology Co. Further details are anticipated during Nikola’s first-quarter earnings call on May 7.
Nikola anticipates the recall completion and returning all trucks to customers by the end of the second quarter or early in the third.
“We’re seeing the trucks come back to us,” shared Salim Youssefzadeh, CEO of the truck-as-a-service provider WattEV.
WattEV also acquired the initial two Volvo VNR Electric models from an order of 50 trucks. Volvo’s recall of over 400 VNR Electrics was managed by holding onto the trucks until rectified, avoiding shipping and subsequent recalls.
A Nikola fuel cell electric vehicle hauls a repaired Watt EV battery-electric truck back to the truck-as-a-service provider. (Photo: Nikola)
Nikola disclosed Thursday that it produced 43 fuel cell electric trucks in the first quarter, wholesaling 40 of them.
The Electric Revolution in Medium-Duty Trucks
First and only electric competitor in its classes – for now
Among the sprawling highways of America, a new entrant has arrived to shake up the medium-duty truck segment. Velocity EV, the exclusive distributor of Daimler Truck’s Rizon brand, is making waves with its Class 4 and 5 electric trucks. These cabover models, freshly imported from Japan, are turning heads at Velocity EV dealerships across California, Arizona, Tennessee, Virginia, and North Carolina.
What sets Rizon apart is its user-friendly approach to electrical prowess. Whether sipping on alternating current (AC) or chugging down direct current (DC), these trucks are breaking down barriers to the adoption of electric vehicles in the commercial space.
Alex Voets, the mastermind behind Velocity EV, likened Rizon to a ‘gateway drug’ to electrification. “People are hesitant at first. Kilowatt hours, chargers – it’s a whole new world,” Voets chuckled. “But once they get a taste of Rizon, they’re hooked.”
Trucking Towards Tomorrow: A Tipping Point
As the wheels of progress turn slowly, electric trucks are inching their way into mainstream acceptance. Alex Voets perceives a ‘tipping point’ on the horizon, a moment when electric trucks will flood the streets, becoming a common sight in the daily grind of transportation.
While the road to electrification has been bumpy, with delays in environmental regulations like the California Advanced Clean Fleets rule, Voets remains optimistic. “It’s all about seeing these trucks in action,” he explained. “Now that they’re making deliveries, the market is buzzing with firsthand experiences, and that’s where the real shift will happen.”
A Legacy of Innovation: Motiv Power Systems
Motiv Power Systems stands as a testament to perseverance in the face of change. For over 15 years, the company has been crafting electric chassis for medium-duty trucks, a niche market with vast potential. Founder Jim Castelaz, with a modest production of around 300 trucks, remains resolute in the belief that Motiv’s expertise, coupled with supportive regulations and incentives, will keep them at the forefront of the electrification revolution.
Driving with Hydrogen: General Motors’ Fuel Cell Odyssey
General Motors, a stalwart in the automotive industry, is steering towards new horizons with hydrogen fuel cell technology. With a rich history of exploration in this domain, GM is now seeing tangible commercial progress. The more power-hungry the endeavor, the clearer the value of hydrogen fuel cells becomes to the automaker.
