How Trevor Milton Scammed the World | Nikola Motors Documentary 2023 — Transcript

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1. 0:00In 2020 Nikola Motor Company became more valuable  than Ford. Without selling any vehicles, products
2. 0:07or services and without having any revenue.  Its founder Trevor Milton became a billionaire
3. 0:13and people were calling him the next Elon Musk.  However, everything was built on lies and Trevor
4. 0:19somehow managed to fool everyone. All the way  to 34 billion dollars! This is, unfortunately,
5. 0:25a true story about Nikola, one of the biggest  frauds in history. Trevor Milton was born in
6. 0:31Layton Utah in 1982. In 2004, 22 year old Trevor  dropped out of college after just one semester,
7. 0:37to start his first company called Saint George  Security and Alarm, an alarm system dealership.
8. 0:42Two years later Trevor sold this company to  businessman Glenn Pilz for 300,000 dollars. This
9. 0:48is already where the first lies started. Trevor  faked the company's books and misled Pilz during
10. 0:54the sale. And the business soon became a disaster.  Years later Pilz told CNN how this purchase ruined
11. 1:00his life. Pilz said he took every dollar from  his 401k and savings to buy this company. And
12. 1:05lost a 300,000 down payment and faced two home  foreclosures, after the business didn't live up
13. 1:10to the projected financial returns. Immediately  after the sale, Trevor started another company.
14. 1:14uPillar.com, a classified ad website focused on  cars. Former employees said it struggled to find
15. 1:21dealership clients or attract customers. And never  turn their profit. While all this was happening,
16. 1:26Trevor founded an alternative energy vehicle  company called dHybrid inc. which retrofitted
17. 1:32commercial trucks with engines that could run on  natural gas instead of diesel. And it also had the
18. 1:36ambition to build power plants in the future.  Around this time, Trevor's company uPillar.com
19. 1:41had laid off its employees and Trevor shifted  his money and attention to dHybrid. The startup
20. 1:46then landed the Swift contract which included a  2 Million dollar upfront payment for research and
21. 1:52development and to install the technology on the  first batch of trucks. In 2012 Trevor sold dHybrid
22. 1:58for 3 Million dollars to company sPower. This  sale resulted in a lawsuit from the buyer just
23. 2:04one month later, because dHybrid misrepresented  its technology readiness, its engine system didn't
24. 2:09perform as well as advertised and it didn't meet  Environmental Protection Agency standards. What
25. 2:15followed was the termination of the deal and  Trevor soon closed the company. A few months
26. 2:20later, in October 2012, Trevor and his father  incorporated a new company, with a very original
27. 2:26name: dHybrid Systems. It was similar to the  previous company except with a greater focus on
28. 2:31building natural gas and hydrogen storage systems.  It operated from the same office with the dHybrid
29. 2:37sign on the door. Just two years later, Trevor  sold 80% of the company to Worthington Industries,
30. 2:43a metals manufacturer, for 12 Million dollars  in cash. One would think that Trevor learned
31. 2:48his lesson after this lucky multi-million  dollar exit, but this is just the beginning.
32. 2:55This brings us to the year 2014, the year Trevor  founded his most infamous startup: Nicola Motors.
33. 3:01A company named after famous inventor Nikola  Tesla. However unlike electric car maker Tesla,
34. 3:07which uses electric cars that are recharged  by plugging them in, Nikola planned to build
35. 3:11vehicles that use hydrogen fuel cell technology.  Two years later, in 2016, the company shocked the
36. 3:18trucking world when it unveiled the Nikola One.  A hydrogen-fueled semi truck intended to be a
37. 3:23sleeper cab with eight wheels. The design included  a 320 kilowatt per hour EV battery that supplied
38. 3:30six traction electric motors for 1000 horsepower  and 2000 pound per feet of torque. The model
39. 3:35was to get its 300 kilowatts of power and 1200  mile range from hydrogen fuel cells. According
40. 3:42to Trevor, the prototype shown at the event is  already fully working. Trevor Milton: "So it's
41. 3:47a little expensive okay you could probably buy  a jet with what it costs to build this thing. So
42. 3:51we're going to try to keep people from driving  off, but this thing fully functions and works
43. 3:55which is really incredible. And this truck will  come to market I can promise you that. For every
44. 3:59doubter out there that said that there's no way  this is true. How can that be possible. We've
45. 4:04done it it's my pleasure to actually let you guys  enjoy the night, see the truck, know it's real,
46. 4:08touch it, feel how sturdy it is. You're going  to see that this is a real truck this is not a
47. 4:13pusher. Everyone was shocked and the hype around  the company grew rapidly. Nikola started making
48. 4:18pre-orders immediately after the announcement  and said that it had received 7 000 pre-orders,
49. 4:23amounting to more than 2.3 billion dollars. No one  knew at the time this was all one big lie. Nikola
50. 4:30had zero working trucks and weren't anywhere close  to developing the technology needed for everything
51. 4:35it promised. The "fully working truck" shown at  the event was just an empty shell without any
52. 4:40engine, assembled at the last minute, just a week  before the show. It's hard to say if Trevor's plan
53. 4:46was to scam everyone or if he really believed he  can deliver on the promises, but it didn't change
54. 4:51the fact that millions of dollars started pouring  in. This apparently wasn't enough and Nikola went
55. 4:57through another round of investments. Everyone  wanted to be part of this historic breakthrough in
56. 5:01the trucking world. But, as time passed, suspicion  grew among many people about the Nikola One and
57. 5:08its capabilities. Following this, Nikola released  a video of a seemingly fully functioning Nikola
58. 5:12One truck driving down the road in Arizona. Once  again, there was a lot of hype and excitement and
59. 5:17people couldn't wait for the first pre-production  units to be released. But at that time,
60. 5:22Trevor didn't have any such plans. He only wanted  to raise more money. This video was later found
61. 5:28to be completely faked. The truck in the video  had no engine, was towed to the top of the hill
62. 5:32and then rolled down to make it seem like it was  fully working. One Nikola engineer later revealed
63. 5:38that it even had duct-taped doors so it wouldn't  fall off, and the Nikola One project was abandoned
64. 5:43immediately after the 2016 reveal event. No one  outside the company of course knew about this and
65. 5:49people still believed in Nikola's plans. Around  this time, 37 year old Trevor owned 40% of the
66. 5:55company, which was at that time worth 3 billion  dollars and became a billionaire. Probably the
67. 6:00only one that built this much wealth on just  lies, without delivering literally anything.
68. 6:05Since Trevor knew Nikola One isn't happening,  he started to branch out to other activities.
69. 6:10One of them was a worldwide chain of factories  producing the world's cheapest hydrogen. However,
70. 6:15this was quickly proven to be impossible and  Nikola later admitted that it doesn't produce
71. 6:19any hydrogen. Shocking, I know. Yet, oil giant  BP invested in Nikola and wanted to work with
72. 6:26it on its alternative fuel technology. In 2019  Nikola announced it would go public. This is
73. 6:31the dream of every entrepreneur and investor.  On the next day Nikola revealed a new product:
74. 6:37High-density batteries that promised to double the  efficiency and capacity of lithium-ion batteries.
75. 6:43Trevor called the prototype cell "the single  most important advancement in electric vehicle
76. 6:47history". Following this Brewing Company  Anheuser-Busch pre-ordered 800 trucks with
77. 6:52this new technology from Nikola. But as you  might have guessed, this was yet another lie,
78. 6:57and these new batteries were never delivered. The  reason why it happened is actually pretty funny
79. 7:02for once. To develop this technology, Nikola  bought the battery cell company Zap-go and at
80. 7:07this time, Nikola was the scammed one. Because  Zap-go lied about its technology and it was one
81. 7:12huge scam. Trevor probably hadn't done his due  diligence, because Zap-go's CEO scammed NASA with
82. 7:18this technology just a few months before this.  This of course resulted in yet another lawsuit.
83. 7:24All of this didn't stop Nikola and it successfully  went public on June 4th 2020. One week later its
84. 7:32valuation peaked at 34 billion dollars. It reached  this thanks to a hydrogen truck that was never
85. 7:37made, fake batteries and many other lies. On  top of that, in that quarter Nikola's revenue
86. 7:44was 36,000 dollars, for installing solar panels  on Trevor's house. To put this in perspective,
87. 7:49Nikola was at this time more valuable than Ford  which had 28 billion dollars valuation, the
88. 7:56revenue of 155 billion dollars and sold 5 million  vehicles. How is it possible that the investors
89. 8:02didn't care about Nikola's financials you ask?  Well, another lie of course. Nikola didn't go
90. 8:08public via traditional IPO. It used a reverse  merger. This way it didn't have to disclose
91. 8:13all the details about the company. However this  wasn't known back then and at the time Trevor was
92. 8:19a superstar, overnight billionaire, genius, role  model, next to Elon Musk. Amongst all of this,
93. 8:26Nikola signed a 2 Billion dollar deal with GM  for 11% stake in the company to build an electric
94. 8:32SUV - Nikola Badger. It of course, doesn't exist  to this day. However, this glory didn't last long.
95. 8:39On September 10th, 2020, two days after Nikola  partnered with General Motors, short seller
96. 8:44Hindenburg Research released a report accusing  Trevor of making false statements over the course
97. 8:49of many years and characterizing Nikola Motor  Company as an intricate fraud. "Nikola Shares are
98. 8:55tumbling after a short seller called the company  quote an intricate fraud built on dozens of lies."
99. 9:01It was later revealed that Hindenburg Research  was working with a Nikola whistleblower for the
100. 9:05report. And that amateur private investigators  were surveilling them on behalf of the company.
101. 9:10Nikola's stock fell by 8% that day and an  additional 15% the following day. And this
102. 9:16was just the beginning of the free fall. Following  this, Trevor deleted all his social media accounts
103. 9:21and disappeared. Ten days after the report, on  September 20th, Trevor stepped down as CEO and
104. 9:27Nikola was being sued by at least one law firm  representing shareholders for possible fraud. The
105. 9:33investigation started and one year later, in July  2021, United States Federal grand jury returned an
106. 9:40indictment against Trevor Milton, that included  three counts of securities fraud and wire fraud.
107. 9:46He also faces civil securities fraud charges  from the SEC. Trevor surrendered to authorities,
108. 9:51pled not guilty to the charges and was freed on a  100 Million dollar bail. In October 2022, after a
109. 9:57day of deliberation, the jury found Trevor guilty  of one count of securities fraud and two counts of
110. 10:02wire fraud, the most serious of which carries a  maximum prison sentence of 20 years. Prosecutors
111. 10:08portrayed Trevor as a serial fabricator, who  wooed investors by falsely claiming that Nikola
112. 10:13was close to producing long-haul trucks, that  could run emission free on cheap hydrogen. "Trevor
113. 10:18Milton is a con man." Jordan Estes, assistant U.S  attorney said as she summarized the government's
114. 10:23case. "He lied to investors to get their money,  plain and simple." As of today Trevor remains free
115. 10:30on a 100 Million dollar bond as his sentencing  on three fraud convictions was delayed until June
116. 10:3521st 2023. Why did all this happen? Trevor was  a serial con man, he knew what investors wanted
117. 10:44to hear and how to get their money. On top of  that, 2020 was an insane year for the stock
118. 10:49market. Everything went up, especially Tesla,  which peaked at one trillion dollar valuation
119. 10:54that year. And investors were looking for the  next Tesla and the next Elon Musk. And Trevor
120. 11:00with Nikola seemed like the right fit. But maybe,  just maybe, it was too good to be true. Ahat do
121. 11:07you think? Let me know in the comments. Thanks  for watching, have a nice day and see you soon.
122. 11:17<3