17 ms·

Nikola’s founder steps down from board as company faces fraud allegations

155 points by joenathanone 6y ago

ericmay 6y ago
This told me all I needed to know. "The entire infotainment system is a HTML 5 super computer," Milton said. "That's the standard language for computer programmers around the world, so using it let's us build our own chips. And HTML 5 is very secure. Every component is linked on the data network, all speaking the same language. It's not a bunch of separate systems that somehow still manage to communicate." [1] [1] https://www.truckinginfo.com/330475/whats-behind-the-grille-of-the-new-nikola-hydrogen-electric-truck https://www.truckinginfo.com/330475/whats-behind-the-grille-...
- seebetter 6y ago
  He should had went with a 'hexavigesimal chipset'. A base 26 system could be capable of rendering reality with the right enhancements. https://www.quora.com/Could-you-make-a-CPU-that-processes-on-base-10-instead-of-base-2 https://www.quora.com/Could-you-make-a-CPU-that-processes-on...
- croddin 6y ago
  Well speaking of trucks and not understanding technology, that is pretty much on the level of: “The internet is not a big truck. It’s a series of tubes...”
- jariel 6y ago
  Again this is not remotely worrisome. Tech people, and smart people in general, need to learn how to step out of their own understanding of the world and see their own fields as others do. Very few people actually know what HTML really is or how it works, and would be hard pressed to describe it. This quote is an executive mangling the description of some tech that otherwise might make sense. After all, Javascript is part of HTML5 and that could very well be used on various parts of the system, 'linked on the data network, all the same language'. And it is 'a language' that many programmers know how to speak around the world. The bit I can't figure out is 'lets us build our own chips' which is a stretch. This is a guy not really knowing what he is talking about, but with a few word changes, it's mostly rational. The other stuff is far more scary.
  - DevX101 6y ago
    Taken in isolation, the statement isn't catastrophically bad. But it does tell me some things about the speaker's character including: - Has limited understanding of technology - Is prone to overstatement, if not outright lying - Is willing to use technobabble to describe his product Those conclusions, if coming from a normal layman, might just make me roll my eyes, but coming from the CEO of supposedly technology centric company that hasn't yet released a product, it raises massive alarm bells and has me running to sell shares or short the company.
    - jariel 6y ago
      So yes, it does add suspicion in context - but of all the 'suspicious things' - it's the least suspicious. Most car execs would struggle with this were they to have to read an unprepared statement.
      - chii 6y ago
        somebody with integrity would just admit they dont know the tech, but point out that he has trusted techies who _do_ know.
        solarkraft 6y ago
        Do sales people usually have integrity?
    - bob33212 6y ago
      Not understanding what is going on under the hood of software systems is a huge risk for a manager. A Demo could look and feel awesome. But the whole thing could be dependent on a npm package maintainer not disabling his account. And you don't understand that until your entire fleet gets bricked overnight.
  - iNate2000 6y ago
    Also, how do we know that the quote is even accurate? If the CEO misstates some technical jargon, what’s the likelihood that the reporter from an unrelated field is going to get the misstatement correct?
- valine 6y ago
  Rolling the semi down a hill calling it “In motion” in a promotional video is what did it for me. Original video: https://www.youtube.com/watch?v=IAToxJ9CGb8 https://www.youtube.com/watch?v=IAToxJ9CGb8 Nokola’s admission: https://arstechnica.com/cars/2020/09/nikola-admits-prototype-was-rolling-downhill-in-promotional-video/ https://arstechnica.com/cars/2020/09/nikola-admits-prototype...
  - wlesieutre 6y ago
    When they said “Feels like a luxury car with sports performance” I can only assume they meant it like this: https://www.youtube.com/watch?v=VoeQdse7aLU https://www.youtube.com/watch?v=VoeQdse7aLU
    - dylan604 6y ago
      the engines had to be running so that power steering and brakes would work. yet they sound designed this to make it sound like the engines were not running.
      - wlesieutre 6y ago
        You can also see the tach idling at 1000 RPM, but the "rolling down a hill" part is accurate. I wonder if Nikola had their brakes working or not.
      - djbebs 6y ago
        Why would the engine be required for the brakes and steeri g to function? Am i taking crazy pills here?
        dylan604 6y ago
        Ever tried to turn the steering wheel when the engine is not running? Power steering[0] uses a hydraulic system to make steering the car nearly effortless compared to cars without it. The weight of the car and the rubber of the tires on the ground causes a lot of friction (the actual force moving the car down the road). That friction makes it difficult to just move the wheel. Power steering is one of the many pulleys the engine belt is threaded. Brakes are also hydraulically operated. Ever pump the brakes in your car when the engine isn't running? That gets very difficult as well without the assist of the running engine. [0] https://en.wikipedia.org/wiki/Power_steering https://en.wikipedia.org/wiki/Power_steering
- tenaciousDaniel 6y ago
  I'm sharing it with everyone I know. This might be the most hilarious marketing copy I've ever come across. It's almost like a parody.
- can16358p 6y ago
  The buzzword soup from the snippets reminded me of the scene from CSI where they were "building a GUI interface in Visual Basic to trace an IP address".
  - chii 6y ago
    at least that CSI scene still makes sense and is possible!
  - m4tthumphrey 6y ago
    This was new to me so had to Google it. Did not disappoint! https://www.youtube.com/watch?v=hkDD03yeLnU https://www.youtube.com/watch?v=hkDD03yeLnU Edit: The correct URL!
    - dylan604 6y ago
      I was hoping your link was going tot he CSI scene in question. Sad for me.
      - m4tthumphrey 6y ago
        It most definitely should have been! Edited!
  - st1x7 6y ago
    And of course someone built it for real - https://archive.codeplex.com/?p=guivbip https://archive.codeplex.com/?p=guivbip
  - gamblor956 6y ago
    I don't understand what's wrong with that? IRL that is exactly the type of thing VB is used for. It's easy for non programmers to design interfaces, relatively intuitive to program, and it doesn't require compilation or other fancy or complicated processes to use the completed program. It's literally WYSIWYG programming.
    - 6y ago
- zpeti 6y ago
  I'll raise you: "It's called Rebo and it's the first bottle that cleans the planet as you drink. One Rebo drunk is one plastic bottle collected as simple as that. Rebo is a smart bottle equipped with a laser time-of-flight sensor and a Bluetooth transmitter that measures and senses the water you drink. The Rebo the app captures the information and records it into the blockchain transforming it into green credits that sponsor the collection of plastic bottles every minute." Source: https://www.youtube.com/watch?v=KupJgVupEtk https://www.youtube.com/watch?v=KupJgVupEtk
  - edoceo 6y ago
    What the heck does this even mean? This is crazier than the stuff my cannabis business clients come up with.
    - umvi 6y ago
      The bottle cap has a laser sensor that measures the water level in the bottle. When you drink all the water, there is a Bluetooth chip (also in the cap) that notifies the app on your phone, which phones home and records that you drank a bottle of water into a DB (apparently a blockchain). The company then has a deal with some other company that for every bottle of Rebo you drink, it funds the collection of plastic waste collection. I admit they chocked it full of too many buzzwords to make it sound cooler than it is, but at least the concept sort of makes sense compared to the hot air the Nikola CEO blew.
      - giarc 6y ago
        There are a ton of companies doing this "Toms shoes" model (buy one, give one) and it doesn't need to be complex. "For every bottle of water you purchase, we fund the clean up of 1000 bottles". Why bring lasers into it?
        ChuckMcM 6y ago
        Because they couldn't figure out how to credibly add "Machine learning" or "AI" and lasers was the next buzzword on the "What's hot" list?
- joaomacp 6y ago
  Not even GPT-3 could be this nonsensical.
- cbsks 6y ago
  But do they use military grade encryption?? And I’d feel more comfortable if a block chain was involved, somehow.
  - dylan604 6y ago
    They do use the best stainless steel that they "could find", but not necessarily the best stainless steel full stop. And of course block chain is involved. Everyone knows that if you want a crowd funded campaign or get VC funding you need to only need to include the phrase "AI", "ML", or "block chain". Or add all three for a triple score combo.
- new_realist 6y ago
  "What people should absolutely have zero concern about, and I mean zero, is that Tesla will achieve a 10,000 unit production week by the end of next year."
- new_realist 6y ago
  1,433 days since Elon Musk started charging Tesla customers for 'self driving' that he said would be able to drive from Los Angeles to New York city with no human intervention by the end of 2017.
  - rorykoehler 6y ago
    Can't you do that now? Edit: https://www.thedrive.com/news/5273/alex-roy-shatters-electric-and-autonomous-cannonball-run-records-in-a-tesla https://www.thedrive.com/news/5273/alex-roy-shatters-electri...
  - kanox 6y ago
    Being late does not make you a fraud. Tesla does have a real team working on self driving hardware and software and they're shipping it inside cars. It's not clear that Nikola has much more than powerpoint. They got a lot of impressive-sounding partnerships going but so did Theranos.
    - itsoktocry 6y ago
      >Being late does not make you a fraud. Then you can literally say anything and claim "just not yet!". Amazing people say things like this with a straight face. >It's not clear that Nikola has much more than powerpoint. Nikola has real teams working on real things, too. They are just nowhere near where they claim to be.
      - 52-6F-62 6y ago
        > Then you can literally say anything and claim "just not yet!". To play a little devil's advocate, then... Wouldn't that put most startups and Silicon Valley into the "fraud" camp? Net positive revenue is always coming and funds are continuously raised on that promise...
      - valuearb 6y ago
        When did Elon fake a video of a Tesla autonomously driving cross country?
- itsoktocry 6y ago
  >This told me all I needed to know. How is this any different the nonsense Musk pumps out: 1. Machines in the factory moving so fast you need a strobelight 2. Solar tiles that will print money 3. Full self-driving on all cars since 2016 4. A brain chip that will cure autism and on and on...
  - dpiers 6y ago
    Both emperors are naked, one just has a much higher approval rating.
    - itsoktocry 6y ago
      Agreed. I wonder if this will have more people asking questions about Tesla. Tesla is a tougher one, because they do produce a good product, while exaggerating far more than they produce.
    - nickik 6y ago
      Tesla literally own more then 50% of the US EV market. The own like 18% of the global EV, and 28% of full electric market. And they have been increasing global market share year over year. They have grown the amount of products they sell every year. They have the largest global charging network. The build the biggest battery in the world. The list goes on. In 2015 Musk said they want to produce 2020 they want to produce 500k vehicles, and even with covid they will come close to this or even hit it. To compare the two is beyond ridiculous. Nikola literally never deliver a single vehicle or achieved a single significant engineering goal. If you actually think they are remotely comparable there is something seriously wrong with your perspective on the world.
  - bob33212 6y ago
    Milton cannot explain why HTML5 is secure, because it doesn't make any sense. He is just repeating buzzwords. Musk can explain how he could build a very fast factory. Maybe he is wrong and there is some sort of thermal limit that he is going to hit before getting it to that speed. But it is a real plan. He isn't just throwing out buzzwords to attract investors.
detaro 6y ago
duplicate: https://news.ycombinator.com/item?id=24539684 https://news.ycombinator.com/item?id=24539684
fingerprinter 6y ago
I haven't paid a lot of attention to Nikola and was surprised when a friend said they had gone public and saw their valuation. This one always felt like a fraud when it was private. How was it able to go public? Isn't that supposed to root out these things? Hearing about their revenue was an eye opener for sure. Side note, I always wonder about the WeWorks and Nikola's of the world. The founders, who are obvious frauds in retrospect, still probably walk away with hundreds of millions if not a few billion. Sometimes it feels like being a decent human being doesn't pay off. Doesn't help that our current political environment is also rewarding the worst in us too
- cultus 6y ago
  I think this whole debacle really brings into focus how poor of a job our bloated financial markets do at allocating capital. Literally their one purpose that justifies their existence, and they are comically bad at.
  - adventured 6y ago
    The US market is eventually correct (which is exactly what you're seeing with Nikola getting properly dismantled), not efficient on every trade or even short-term. I think your premise fundamentally misunderstands how very large, liquid markets with huge numbers of participants like the US stock market actually function. To paraphrase a famous quote from Ben Graham: short-term the market is a voting machine (prone to trends, mania, over-reactions both directions), long-term it's a weighing machine (value will out). That's still spot on all these decades later. There is about $36 trillion in value in the public US markets. Can you support your premise that Nikola is somehow relevant as a point of evidence that the broad financial markets do a poor job of allocating capital? Nikola is barely a rounding error in the scheme of the US financial markets.
    - cultus 6y ago
      Financial markets grossly misjudged risk and caused the 2008 financial collapse. The recession previous to that was caused by a tech bubble that saw Pets.com with a greater valuation than GE. These incidents of irrationality have huge long-term effects on the real economy. The middle and lower class never recovered from 2008. Those were on markets and their irrationality. We are currently in giant asset bubble (enabled by the Fed, but still) in the middle of the worst recession since the Great Depression. It will crash, and take the economy with it. As far as allocating capital, the markets have systematically discouraged investment and encouraged stock buybacks and other uses of money that not only don't promote the real economy, but increase risk (necessitating more bailouts). Our finance industry systematically pushes industries into rent-seeking instead of production, as well as increasing financialization. Sure, Nikola isn't significant in things, but it is a microcosm of how the market as a whole operates.
moneywoes 6y ago
Guilt
textech 6y ago
SEC is nowhere to be seen. What I'm interested in is to see who actually bought into this scam? Is there a list of all the (smart money...cough) hedge funds, retirement funds and others who invested significantly in this scam? A clown basically masquerading as a visionary founder/tech with everything outsourced to other companies is literally walking away with billions by scamming the so-called "smart money".
- austinkhale 6y ago
  Nowhere to be seen? Wasn’t it their investigation being opened that forced him out?
- jjulius 6y ago
  >SEC is nowhere to be seen. Really? >The U.S. Securities and Exchange Commission is examining Nikola Corp. to assess the merits of a short-seller’s allegations that the electric-truck maker deceived investors about its business prospects, according to people familiar with the matter. https://www.bloomberg.com/news/articles/2020-09-14/sec-said-to-examine-nikola-over-short-seller-s-fraud-allegations https://www.bloomberg.com/news/articles/2020-09-14/sec-said-...
- bitxbit 6y ago
  To be honest, SEC has not been doing its job for the past four years since this admin took control.
  - pas 6y ago
    Not that it did much before that, since it lacked funding. Just like the IRS, CFTC, and FinCEN. And it lacked funding mostly because regulatory capture / special interest groups successfully lobbied to keep them "simple", to keep costs down. Of course keeping them simple sounds great but they are all very much in need of reforms, serious investment to modernize and to catch up with the market, which became very complex.
- swarnie_ 6y ago
  > What I'm interested in is to see who actually bought into this scam? /r/wallstreetbets - As usual some big winners and big losers on both sides on the way up and the way down. Its not quite "Pin the suicide hotline to the top of the sub" levels yet (bitcoin 2017) but there are some people losing their shirts over this.
xwdv 6y ago
Only 6 days ago I opened a massive short position on this company, wish I shorted even more. Reference: https://news.ycombinator.com/item?id=24473631 https://news.ycombinator.com/item?id=24473631
- martythemaniak 6y ago
  Nice. I still can't believe there's anyone that thinks there's anything serious behind this company. People want a crazy volatile play stock, goes up fun, goes down fun, etc. I get it, fun game. But actual products etc? Who believes that?
- KorfmannArno 6y ago
  Might I ask how (as in which platform/bank/etc) you shorted NKLA stock? I tried shorting it on alpaca.markets, although on a paper trading account, with no luck: "asset NKLA cannot be sold short". related: https://forum.alpaca.markets/t/asset-cannot-be-sold-short/1023/4 https://forum.alpaca.markets/t/asset-cannot-be-sold-short/10...
  - bluedevil2k 6y ago
    If you're serious about getting in, I'd recommend you NOT to short this stock and instead buy some Puts (options) on it. Short selling leaves you totally exposed if this stock pops up, Kodak or Hertz style. This is the 2nd favorite stock over on /r/wallstreetbets so you can never be sure where the stock price is headed.
    - anonfounder152 6y ago
      While what you said is true, puts are offered by market makers who have the expected price action priced in and so they have huge premiums right now to the point where it's just a -EV gamble. While shorting will still be able to sell to irrational investors. Puts also have a risk that if there is a trading halt, and your puts expire within them, they will expire worthless if you cannot short the stock to exercise them.
- 6y ago
brogrammernot 6y ago
Let’s just say most technology folks in Arizona had little belief in this company after their tech lead gave a talk/presentation at a meet up where their programming paradigms & setup just didn’t make any sense. Not like didn’t make any sense because folks didn’t like the programming stack choices or anything it just literally didn’t make sense what they were trying to do.
- zzbzq 6y ago
  I feel like that every 3rd article on the Netflix tech blog and AFAIK netflix is real
- admn2 6y ago
  I'm curious what he said. Any links or recollection? How could GE not have done this simple due diligence? Even seeing the HTML5 quote at the top comment here is startling.
  - mrep 6y ago
    Posting Siconik's comment on arstechnica: https://arstechnica.com/cars/2020/09/nikola-admits-prototype-was-rolling-downhill-in-promotional-video/ https://arstechnica.com/cars/2020/09/nikola-admits-prototype... To address some of the "how will GM react" question: - GM has conspired with Nikola management to, for the lack of a better term, rob Nikola investors. The chances are great that GM knew exactly what Trevor Milton and Nikola really are, and price they extracted for playing along reflects that. Nikola's supposed USP was this "amazing, decades-ahead" technology that somehow made hydrogen-based propulsion not just competitive, but a non-brainier. They were going to drive everyone out of the market! But don't take my word for it: https://nikolamotor.com/pdfs/Nikola_Pre-Sale_June13_FINAL.pdf https://nikolamotor.com/pdfs/Nikola_Pre-Sale_June13_FINAL.pd... Quote: “Our technology is 10-15years ahead of any other OEM in fuel efficiencies, MPGand emissions. We are the only OEM to have a near zero emission truck and still outperform diesel trucks running at80,000 pounds. To haveover7,000reservationstotaling more than 2.3 billion dollars, withfive months remaininguntil our unveiling ceremony, is unprecedented,”said Milton.TheNikola One truck leasing program costs $4000 to $5000 per month,depending on which truck configuration and options the customer chooses. The first million miles offuel is included with every truck sale, offsetting 100% of the monthly lease for every owner. An average diesel burns over $400,000 in fuel and racks up over $100,000 in maintenancecostsover 1,000,000 miles. These costs are eliminated with the Nikola One lease.“We believe we will pass the current market leaders likeDaimler, PACCAR, Volvo and Navistar in sales orders within the next 12-24 months.Just imagine the orders that will come in once we begin taking dealer applications. We have shown other OEMs and their shareholders why they should be nervous about NikolaMotor Company. Some of the top class 8 dealerships in America have reached out and are willing to either add our brand or move away from their existing brands,” he added. So, with this amazing tech at hand, let's look at the terms GM was able to secure from Nikola: - $700M in cash to build a production line that GM retains full ownership of. - $2B to design a vehicle platform that GM retains full ownership of. - Profit on the front end, as an exclusive major drivetrain component supplier - Profit on the back end, thanks to a cost-plus nature of the contract - Profit off all of Nikola's alleged other products (Class 7/8) trucks, as exclusive drive train supplier - Most of Nikola's ZEV credits That's quite a haul from the company that claimed to have breakthrough technology, which, funny story, they appear to have discarded as part of this deal. The cost-plus contract on top of being an exclusive supplier is also a head-turner: GM would be ordering parts from.. GM to build a truck for Nikola and then charging cost+margin back to them. Nice arrangement if you can get it! Equally interesting is what GM is not getting involved in: - Distribution and sales - Support, Service and Warranty You are free to draw your own conclusions, but if Nikola was actually a legitimate company, this would have been one of the most fundamentally terrible deals in the history of North American capitalism. What it instead appears to be GM's deal with the devil: They managed to extract such inordinate toll from Nikola (precisely because, I would argue, Nikola is build on fraud and was willing to do anything to gain some legitimacy), as to feel comfortable to ignore the ethical end of it.
trikonasana 6y ago
I've always been super skeptical of this company namely because of the founder (and their wholly unoriginal name). A look into his background reveals no prior engineering accomplishments let alone experience. His Wikipedia page says he dropped out of college to pursue sales and marketing. Yet, despite his lack of any professional track-record, he is one of the richest people in all of Utah and a member of the Mormon Church. I guess it's too early to tell if the company is fraudulent, but if the founder is, it's usually a tell-tale sign.
- biophysboy 6y ago
  I grew up in the Mormon church. His career bio is all too common, unfortunately. If you think about it, it starts to make sense: 1. Missionaries spend 2 years trying to "market"/"sell" Mormonism. This might be a harsh way of putting it, but they are trying to recruit and retain members. Naturally, security/alarm sales are a natural summer job for them when they finish. This labor force was likely indispensible to Milton for his first company, "St. George Security and Alarm". 2. Mormons have a very tight social network. We REALLY trust one another. Its actually one of the great things about the religion. However, this makes us very vulnerable to fraud. There are lots of scummy MLMs in Utah that exploit the already established social circles in Utah. In other words, it doesn't have much to do with the religion's tenets per se, but from the byproducts of it. I personally hope we produce more "Clayton Christiansens" and fewer "Trevor Miltons" for the tech world in the future.
  - ticmasta 6y ago
    >> "St. George Security and Alarm". isn't this why Vivint has been so successful? I thought they pioneered converting recent missionaries into DTD alarm sales...
    - devmunchies 6y ago
      and converting DTD alarm sales into DTD solar sales.
    - biophysboy 6y ago
raverbashing 6y ago
Given that the only thing they had seems to be a truck that goes downhill that's how I think their stock will behave.
hijinks 6y ago
he just got arrested https://twitter.com/sttbreakingnews/status/1308052819430109186?s=21 https://twitter.com/sttbreakingnews/status/13080528194301091...
- sippingjippers 6y ago
  unsourced twitter rumour
  - inscionent 6y ago
    Stock manipulation attempt?
- deleted 6y ago
  [deleted]
- throw_away 6y ago
  This is probably not true & the tweet was deleted: https://twitter.com/QTRResearch/status/1308054293254152194 https://twitter.com/QTRResearch/status/1308054293254152194
ogre_codes 6y ago
Worth mentioning, Milton has made Billions on Nikola. Even if he's convicted of fraud, he's unlikely to serve any time and will still have billions he fleeced off of people.
- gamblor956 6y ago
  It's worth noting that Madoff made billions from his fraud, had to return all of the remaining money to his victims... And will die in prison.
  - ogre_codes 6y ago
    Very very few super-wealthy people serve prison time. Most don't even get convicted. "The advertisement said the truck was 'In Motion', nothing more"... It's clear this is something they've thought out in advance.
    - gamblor956 6y ago
      True, but the ones who became wealthy because of their criminal acts are the ones who get convicted and end up in prison. In large part, this is because the government(s) can and do freeze assets related to financial crimes and frauds. The ones that used their wealth to avoid conviction for non-financial crimes (see the UK sex scandal ongoing right now) generally avoid conviction by spending lots of money on legal defense, which they can do because their assets were not frozen. In this case, if the guy's wealth comes from securities fraud, he won't be able to use it to defend himself because his assets will be frozen.
      - ogre_codes 6y ago
        Milton's was already fairly well off due to his previous smoke and mirrors/ failure to deliver dHybrid. "dHybrid landed a truck-conversion deal with Swift Transportation, leading to a mid-2012 lawsuit predicated on dHybrid's failure to deliver on its agreement.[6] dHybrid would eventually be purchased by Worthington Industries in 2014[7] and, in 2015, Milton founded Nikola Motor Company with his brother, Travis, as the director of operations with a background in construction and remodeling." He has plenty of assets to defend himself and clearly knows how close to the edge of the truth he can get and get away with it.
person_of_color 6y ago
He made $70 million already. What's the likelihood he keeps it?
- mlindner 6y ago
  In cash? Or loans with his stock as collateral? He was taking loans with his stock as collateral to buy more stock. I'm not sure he actually has any money at all once everything rinses out.
sidcool 6y ago
They did produce a truck didn't they? So what happened? Did they run out of cash? Was the product never built? What's the deal?
- tacticalDonut 6y ago
  They've not yet produced a functioning truck. The one they made can't actually move and might not be anything more than a mostly empty shell.
sidcool 6y ago
How did they get GM to invest $2 bn?
- swarnie_ 6y ago
  > The tie-up sent Nikola’s shares surging by 51% and GM’s by 10%. Credit Suisse called it “a crucial validation datapoint on the GM EV strategy.” That's 4bn of share price return for a 10 yea, 2bn partnership. Presumably they'll now parachute there own execs in there to try and salvage something.
- mrep 6y ago
  GM didn't invest 2 billion. GM got 2 billion in stock, 700 million in cash and a bunch of other stuff mentioned here for the deal: https://news.ycombinator.com/item?id=24546221 https://news.ycombinator.com/item?id=24546221
dcchambers 6y ago
So this is basically Theranos but for automobiles. Have we learned nothing?

155 points by joenathanone 6y ago

This told me all I needed to know. "The entire infotainment system is a HTML 5 super computer," Milton said. "That's the standard language for computer programmers around the world, so using it let's us build our own chips. And HTML 5 is very secure. Every component is linked on the data network, all speaking the same language. It's not a bunch of separate systems that somehow still manage to communicate." [1] [1] https://www.truckinginfo.com/330475/whats-behind-the-grille-of-the-new-nikola-hydrogen-electric-truck https://www.truckinginfo.com/330475/whats-behind-the-grille-...

seebetter 6y ago
He should had went with a 'hexavigesimal chipset'. A base 26 system could be capable of rendering reality with the right enhancements. https://www.quora.com/Could-you-make-a-CPU-that-processes-on-base-10-instead-of-base-2 https://www.quora.com/Could-you-make-a-CPU-that-processes-on...
croddin 6y ago
Well speaking of trucks and not understanding technology, that is pretty much on the level of: “The internet is not a big truck. It’s a series of tubes...”
jariel 6y ago
Again this is not remotely worrisome. Tech people, and smart people in general, need to learn how to step out of their own understanding of the world and see their own fields as others do. Very few people actually know what HTML really is or how it works, and would be hard pressed to describe it. This quote is an executive mangling the description of some tech that otherwise might make sense. After all, Javascript is part of HTML5 and that could very well be used on various parts of the system, 'linked on the data network, all the same language'. And it is 'a language' that many programmers know how to speak around the world. The bit I can't figure out is 'lets us build our own chips' which is a stretch. This is a guy not really knowing what he is talking about, but with a few word changes, it's mostly rational. The other stuff is far more scary.
- DevX101 6y ago
  Taken in isolation, the statement isn't catastrophically bad. But it does tell me some things about the speaker's character including: - Has limited understanding of technology - Is prone to overstatement, if not outright lying - Is willing to use technobabble to describe his product Those conclusions, if coming from a normal layman, might just make me roll my eyes, but coming from the CEO of supposedly technology centric company that hasn't yet released a product, it raises massive alarm bells and has me running to sell shares or short the company.
  - jariel 6y ago
    So yes, it does add suspicion in context - but of all the 'suspicious things' - it's the least suspicious. Most car execs would struggle with this were they to have to read an unprepared statement.
    - chii 6y ago
      somebody with integrity would just admit they dont know the tech, but point out that he has trusted techies who _do_ know.
      - solarkraft 6y ago
        Do sales people usually have integrity?
  - bob33212 6y ago
    Not understanding what is going on under the hood of software systems is a huge risk for a manager. A Demo could look and feel awesome. But the whole thing could be dependent on a npm package maintainer not disabling his account. And you don't understand that until your entire fleet gets bricked overnight.
- iNate2000 6y ago
  Also, how do we know that the quote is even accurate? If the CEO misstates some technical jargon, what’s the likelihood that the reporter from an unrelated field is going to get the misstatement correct?
valine 6y ago
Rolling the semi down a hill calling it “In motion” in a promotional video is what did it for me. Original video: https://www.youtube.com/watch?v=IAToxJ9CGb8 https://www.youtube.com/watch?v=IAToxJ9CGb8 Nokola’s admission: https://arstechnica.com/cars/2020/09/nikola-admits-prototype-was-rolling-downhill-in-promotional-video/ https://arstechnica.com/cars/2020/09/nikola-admits-prototype...
- wlesieutre 6y ago
  When they said “Feels like a luxury car with sports performance” I can only assume they meant it like this: https://www.youtube.com/watch?v=VoeQdse7aLU https://www.youtube.com/watch?v=VoeQdse7aLU
  - dylan604 6y ago
    the engines had to be running so that power steering and brakes would work. yet they sound designed this to make it sound like the engines were not running.
    - wlesieutre 6y ago
      You can also see the tach idling at 1000 RPM, but the "rolling down a hill" part is accurate. I wonder if Nikola had their brakes working or not.
    - djbebs 6y ago
      Why would the engine be required for the brakes and steeri g to function? Am i taking crazy pills here?
      - dylan604 6y ago
        Ever tried to turn the steering wheel when the engine is not running? Power steering[0] uses a hydraulic system to make steering the car nearly effortless compared to cars without it. The weight of the car and the rubber of the tires on the ground causes a lot of friction (the actual force moving the car down the road). That friction makes it difficult to just move the wheel. Power steering is one of the many pulleys the engine belt is threaded. Brakes are also hydraulically operated. Ever pump the brakes in your car when the engine isn't running? That gets very difficult as well without the assist of the running engine. [0] https://en.wikipedia.org/wiki/Power_steering https://en.wikipedia.org/wiki/Power_steering
tenaciousDaniel 6y ago
I'm sharing it with everyone I know. This might be the most hilarious marketing copy I've ever come across. It's almost like a parody.
can16358p 6y ago
The buzzword soup from the snippets reminded me of the scene from CSI where they were "building a GUI interface in Visual Basic to trace an IP address".
- chii 6y ago
  at least that CSI scene still makes sense and is possible!
- m4tthumphrey 6y ago
  This was new to me so had to Google it. Did not disappoint! https://www.youtube.com/watch?v=hkDD03yeLnU https://www.youtube.com/watch?v=hkDD03yeLnU Edit: The correct URL!
  - dylan604 6y ago
    I was hoping your link was going tot he CSI scene in question. Sad for me.
    - m4tthumphrey 6y ago
      It most definitely should have been! Edited!
- st1x7 6y ago
  And of course someone built it for real - https://archive.codeplex.com/?p=guivbip https://archive.codeplex.com/?p=guivbip
- gamblor956 6y ago
  I don't understand what's wrong with that? IRL that is exactly the type of thing VB is used for. It's easy for non programmers to design interfaces, relatively intuitive to program, and it doesn't require compilation or other fancy or complicated processes to use the completed program. It's literally WYSIWYG programming.
  - 6y ago
zpeti 6y ago
I'll raise you: "It's called Rebo and it's the first bottle that cleans the planet as you drink. One Rebo drunk is one plastic bottle collected as simple as that. Rebo is a smart bottle equipped with a laser time-of-flight sensor and a Bluetooth transmitter that measures and senses the water you drink. The Rebo the app captures the information and records it into the blockchain transforming it into green credits that sponsor the collection of plastic bottles every minute." Source: https://www.youtube.com/watch?v=KupJgVupEtk https://www.youtube.com/watch?v=KupJgVupEtk
- edoceo 6y ago
  What the heck does this even mean? This is crazier than the stuff my cannabis business clients come up with.
  - umvi 6y ago
    The bottle cap has a laser sensor that measures the water level in the bottle. When you drink all the water, there is a Bluetooth chip (also in the cap) that notifies the app on your phone, which phones home and records that you drank a bottle of water into a DB (apparently a blockchain). The company then has a deal with some other company that for every bottle of Rebo you drink, it funds the collection of plastic waste collection. I admit they chocked it full of too many buzzwords to make it sound cooler than it is, but at least the concept sort of makes sense compared to the hot air the Nikola CEO blew.
    - giarc 6y ago
      There are a ton of companies doing this "Toms shoes" model (buy one, give one) and it doesn't need to be complex. "For every bottle of water you purchase, we fund the clean up of 1000 bottles". Why bring lasers into it?
      - ChuckMcM 6y ago
        Because they couldn't figure out how to credibly add "Machine learning" or "AI" and lasers was the next buzzword on the "What's hot" list?
joaomacp 6y ago
Not even GPT-3 could be this nonsensical.
cbsks 6y ago
But do they use military grade encryption?? And I’d feel more comfortable if a block chain was involved, somehow.
- dylan604 6y ago
  They do use the best stainless steel that they "could find", but not necessarily the best stainless steel full stop. And of course block chain is involved. Everyone knows that if you want a crowd funded campaign or get VC funding you need to only need to include the phrase "AI", "ML", or "block chain". Or add all three for a triple score combo.
new_realist 6y ago
"What people should absolutely have zero concern about, and I mean zero, is that Tesla will achieve a 10,000 unit production week by the end of next year."
new_realist 6y ago
1,433 days since Elon Musk started charging Tesla customers for 'self driving' that he said would be able to drive from Los Angeles to New York city with no human intervention by the end of 2017.
- rorykoehler 6y ago
  Can't you do that now? Edit: https://www.thedrive.com/news/5273/alex-roy-shatters-electric-and-autonomous-cannonball-run-records-in-a-tesla https://www.thedrive.com/news/5273/alex-roy-shatters-electri...
- kanox 6y ago
  Being late does not make you a fraud. Tesla does have a real team working on self driving hardware and software and they're shipping it inside cars. It's not clear that Nikola has much more than powerpoint. They got a lot of impressive-sounding partnerships going but so did Theranos.
  - itsoktocry 6y ago
    >Being late does not make you a fraud. Then you can literally say anything and claim "just not yet!". Amazing people say things like this with a straight face. >It's not clear that Nikola has much more than powerpoint. Nikola has real teams working on real things, too. They are just nowhere near where they claim to be.
    - 52-6F-62 6y ago
      > Then you can literally say anything and claim "just not yet!". To play a little devil's advocate, then... Wouldn't that put most startups and Silicon Valley into the "fraud" camp? Net positive revenue is always coming and funds are continuously raised on that promise...
    - valuearb 6y ago
      When did Elon fake a video of a Tesla autonomously driving cross country?
itsoktocry 6y ago
>This told me all I needed to know. How is this any different the nonsense Musk pumps out: 1. Machines in the factory moving so fast you need a strobelight 2. Solar tiles that will print money 3. Full self-driving on all cars since 2016 4. A brain chip that will cure autism and on and on...
- dpiers 6y ago
  Both emperors are naked, one just has a much higher approval rating.
  - itsoktocry 6y ago
    Agreed. I wonder if this will have more people asking questions about Tesla. Tesla is a tougher one, because they do produce a good product, while exaggerating far more than they produce.
  - nickik 6y ago
    Tesla literally own more then 50% of the US EV market. The own like 18% of the global EV, and 28% of full electric market. And they have been increasing global market share year over year. They have grown the amount of products they sell every year. They have the largest global charging network. The build the biggest battery in the world. The list goes on. In 2015 Musk said they want to produce 2020 they want to produce 500k vehicles, and even with covid they will come close to this or even hit it. To compare the two is beyond ridiculous. Nikola literally never deliver a single vehicle or achieved a single significant engineering goal. If you actually think they are remotely comparable there is something seriously wrong with your perspective on the world.
- bob33212 6y ago
  Milton cannot explain why HTML5 is secure, because it doesn't make any sense. He is just repeating buzzwords. Musk can explain how he could build a very fast factory. Maybe he is wrong and there is some sort of thermal limit that he is going to hit before getting it to that speed. But it is a real plan. He isn't just throwing out buzzwords to attract investors.

detaro 6y ago

duplicate: https://news.ycombinator.com/item?id=24539684 https://news.ycombinator.com/item?id=24539684

fingerprinter 6y ago

I haven't paid a lot of attention to Nikola and was surprised when a friend said they had gone public and saw their valuation. This one always felt like a fraud when it was private. How was it able to go public? Isn't that supposed to root out these things? Hearing about their revenue was an eye opener for sure. Side note, I always wonder about the WeWorks and Nikola's of the world. The founders, who are obvious frauds in retrospect, still probably walk away with hundreds of millions if not a few billion. Sometimes it feels like being a decent human being doesn't pay off. Doesn't help that our current political environment is also rewarding the worst in us too

cultus 6y ago
I think this whole debacle really brings into focus how poor of a job our bloated financial markets do at allocating capital. Literally their one purpose that justifies their existence, and they are comically bad at.
- adventured 6y ago
  The US market is eventually correct (which is exactly what you're seeing with Nikola getting properly dismantled), not efficient on every trade or even short-term. I think your premise fundamentally misunderstands how very large, liquid markets with huge numbers of participants like the US stock market actually function. To paraphrase a famous quote from Ben Graham: short-term the market is a voting machine (prone to trends, mania, over-reactions both directions), long-term it's a weighing machine (value will out). That's still spot on all these decades later. There is about $36 trillion in value in the public US markets. Can you support your premise that Nikola is somehow relevant as a point of evidence that the broad financial markets do a poor job of allocating capital? Nikola is barely a rounding error in the scheme of the US financial markets.
  - cultus 6y ago
    Financial markets grossly misjudged risk and caused the 2008 financial collapse. The recession previous to that was caused by a tech bubble that saw Pets.com with a greater valuation than GE. These incidents of irrationality have huge long-term effects on the real economy. The middle and lower class never recovered from 2008. Those were on markets and their irrationality. We are currently in giant asset bubble (enabled by the Fed, but still) in the middle of the worst recession since the Great Depression. It will crash, and take the economy with it. As far as allocating capital, the markets have systematically discouraged investment and encouraged stock buybacks and other uses of money that not only don't promote the real economy, but increase risk (necessitating more bailouts). Our finance industry systematically pushes industries into rent-seeking instead of production, as well as increasing financialization. Sure, Nikola isn't significant in things, but it is a microcosm of how the market as a whole operates.

moneywoes 6y ago

Guilt

textech 6y ago

SEC is nowhere to be seen. What I'm interested in is to see who actually bought into this scam? Is there a list of all the (smart money...cough) hedge funds, retirement funds and others who invested significantly in this scam? A clown basically masquerading as a visionary founder/tech with everything outsourced to other companies is literally walking away with billions by scamming the so-called "smart money".

austinkhale 6y ago
Nowhere to be seen? Wasn’t it their investigation being opened that forced him out?
jjulius 6y ago
>SEC is nowhere to be seen. Really? >The U.S. Securities and Exchange Commission is examining Nikola Corp. to assess the merits of a short-seller’s allegations that the electric-truck maker deceived investors about its business prospects, according to people familiar with the matter. https://www.bloomberg.com/news/articles/2020-09-14/sec-said-to-examine-nikola-over-short-seller-s-fraud-allegations https://www.bloomberg.com/news/articles/2020-09-14/sec-said-...
bitxbit 6y ago
To be honest, SEC has not been doing its job for the past four years since this admin took control.
- pas 6y ago
  Not that it did much before that, since it lacked funding. Just like the IRS, CFTC, and FinCEN. And it lacked funding mostly because regulatory capture / special interest groups successfully lobbied to keep them "simple", to keep costs down. Of course keeping them simple sounds great but they are all very much in need of reforms, serious investment to modernize and to catch up with the market, which became very complex.
swarnie_ 6y ago
> What I'm interested in is to see who actually bought into this scam? /r/wallstreetbets - As usual some big winners and big losers on both sides on the way up and the way down. Its not quite "Pin the suicide hotline to the top of the sub" levels yet (bitcoin 2017) but there are some people losing their shirts over this.

xwdv 6y ago

Only 6 days ago I opened a massive short position on this company, wish I shorted even more. Reference: https://news.ycombinator.com/item?id=24473631 https://news.ycombinator.com/item?id=24473631

martythemaniak 6y ago
Nice. I still can't believe there's anyone that thinks there's anything serious behind this company. People want a crazy volatile play stock, goes up fun, goes down fun, etc. I get it, fun game. But actual products etc? Who believes that?
KorfmannArno 6y ago
Might I ask how (as in which platform/bank/etc) you shorted NKLA stock? I tried shorting it on alpaca.markets, although on a paper trading account, with no luck: "asset NKLA cannot be sold short". related: https://forum.alpaca.markets/t/asset-cannot-be-sold-short/1023/4 https://forum.alpaca.markets/t/asset-cannot-be-sold-short/10...
- bluedevil2k 6y ago
  If you're serious about getting in, I'd recommend you NOT to short this stock and instead buy some Puts (options) on it. Short selling leaves you totally exposed if this stock pops up, Kodak or Hertz style. This is the 2nd favorite stock over on /r/wallstreetbets so you can never be sure where the stock price is headed.
  - anonfounder152 6y ago
    While what you said is true, puts are offered by market makers who have the expected price action priced in and so they have huge premiums right now to the point where it's just a -EV gamble. While shorting will still be able to sell to irrational investors. Puts also have a risk that if there is a trading halt, and your puts expire within them, they will expire worthless if you cannot short the stock to exercise them.
6y ago

brogrammernot 6y ago

Let’s just say most technology folks in Arizona had little belief in this company after their tech lead gave a talk/presentation at a meet up where their programming paradigms & setup just didn’t make any sense. Not like didn’t make any sense because folks didn’t like the programming stack choices or anything it just literally didn’t make sense what they were trying to do.

zzbzq 6y ago
I feel like that every 3rd article on the Netflix tech blog and AFAIK netflix is real
admn2 6y ago
I'm curious what he said. Any links or recollection? How could GE not have done this simple due diligence? Even seeing the HTML5 quote at the top comment here is startling.
- mrep 6y ago
  Posting Siconik's comment on arstechnica: https://arstechnica.com/cars/2020/09/nikola-admits-prototype-was-rolling-downhill-in-promotional-video/ https://arstechnica.com/cars/2020/09/nikola-admits-prototype... To address some of the "how will GM react" question: - GM has conspired with Nikola management to, for the lack of a better term, rob Nikola investors. The chances are great that GM knew exactly what Trevor Milton and Nikola really are, and price they extracted for playing along reflects that. Nikola's supposed USP was this "amazing, decades-ahead" technology that somehow made hydrogen-based propulsion not just competitive, but a non-brainier. They were going to drive everyone out of the market! But don't take my word for it: https://nikolamotor.com/pdfs/Nikola_Pre-Sale_June13_FINAL.pdf https://nikolamotor.com/pdfs/Nikola_Pre-Sale_June13_FINAL.pd... Quote: “Our technology is 10-15years ahead of any other OEM in fuel efficiencies, MPGand emissions. We are the only OEM to have a near zero emission truck and still outperform diesel trucks running at80,000 pounds. To haveover7,000reservationstotaling more than 2.3 billion dollars, withfive months remaininguntil our unveiling ceremony, is unprecedented,”said Milton.TheNikola One truck leasing program costs $4000 to $5000 per month,depending on which truck configuration and options the customer chooses. The first million miles offuel is included with every truck sale, offsetting 100% of the monthly lease for every owner. An average diesel burns over $400,000 in fuel and racks up over $100,000 in maintenancecostsover 1,000,000 miles. These costs are eliminated with the Nikola One lease.“We believe we will pass the current market leaders likeDaimler, PACCAR, Volvo and Navistar in sales orders within the next 12-24 months.Just imagine the orders that will come in once we begin taking dealer applications. We have shown other OEMs and their shareholders why they should be nervous about NikolaMotor Company. Some of the top class 8 dealerships in America have reached out and are willing to either add our brand or move away from their existing brands,” he added. So, with this amazing tech at hand, let's look at the terms GM was able to secure from Nikola: - $700M in cash to build a production line that GM retains full ownership of. - $2B to design a vehicle platform that GM retains full ownership of. - Profit on the front end, as an exclusive major drivetrain component supplier - Profit on the back end, thanks to a cost-plus nature of the contract - Profit off all of Nikola's alleged other products (Class 7/8) trucks, as exclusive drive train supplier - Most of Nikola's ZEV credits That's quite a haul from the company that claimed to have breakthrough technology, which, funny story, they appear to have discarded as part of this deal. The cost-plus contract on top of being an exclusive supplier is also a head-turner: GM would be ordering parts from.. GM to build a truck for Nikola and then charging cost+margin back to them. Nice arrangement if you can get it! Equally interesting is what GM is not getting involved in: - Distribution and sales - Support, Service and Warranty You are free to draw your own conclusions, but if Nikola was actually a legitimate company, this would have been one of the most fundamentally terrible deals in the history of North American capitalism. What it instead appears to be GM's deal with the devil: They managed to extract such inordinate toll from Nikola (precisely because, I would argue, Nikola is build on fraud and was willing to do anything to gain some legitimacy), as to feel comfortable to ignore the ethical end of it.

trikonasana 6y ago

I've always been super skeptical of this company namely because of the founder (and their wholly unoriginal name). A look into his background reveals no prior engineering accomplishments let alone experience. His Wikipedia page says he dropped out of college to pursue sales and marketing. Yet, despite his lack of any professional track-record, he is one of the richest people in all of Utah and a member of the Mormon Church. I guess it's too early to tell if the company is fraudulent, but if the founder is, it's usually a tell-tale sign.

biophysboy 6y ago
I grew up in the Mormon church. His career bio is all too common, unfortunately. If you think about it, it starts to make sense: 1. Missionaries spend 2 years trying to "market"/"sell" Mormonism. This might be a harsh way of putting it, but they are trying to recruit and retain members. Naturally, security/alarm sales are a natural summer job for them when they finish. This labor force was likely indispensible to Milton for his first company, "St. George Security and Alarm". 2. Mormons have a very tight social network. We REALLY trust one another. Its actually one of the great things about the religion. However, this makes us very vulnerable to fraud. There are lots of scummy MLMs in Utah that exploit the already established social circles in Utah. In other words, it doesn't have much to do with the religion's tenets per se, but from the byproducts of it. I personally hope we produce more "Clayton Christiansens" and fewer "Trevor Miltons" for the tech world in the future.
- ticmasta 6y ago
  >> "St. George Security and Alarm". isn't this why Vivint has been so successful? I thought they pioneered converting recent missionaries into DTD alarm sales...
  - devmunchies 6y ago
    and converting DTD alarm sales into DTD solar sales.
  - biophysboy 6y ago

raverbashing 6y ago

Given that the only thing they had seems to be a truck that goes downhill that's how I think their stock will behave.

hijinks 6y ago

he just got arrested https://twitter.com/sttbreakingnews/status/1308052819430109186?s=21 https://twitter.com/sttbreakingnews/status/13080528194301091...

sippingjippers 6y ago
unsourced twitter rumour
- inscionent 6y ago
  Stock manipulation attempt?
deleted 6y ago
[deleted]
throw_away 6y ago
This is probably not true & the tweet was deleted: https://twitter.com/QTRResearch/status/1308054293254152194 https://twitter.com/QTRResearch/status/1308054293254152194

ogre_codes 6y ago

Worth mentioning, Milton has made Billions on Nikola. Even if he's convicted of fraud, he's unlikely to serve any time and will still have billions he fleeced off of people.

gamblor956 6y ago
It's worth noting that Madoff made billions from his fraud, had to return all of the remaining money to his victims... And will die in prison.
- ogre_codes 6y ago
  Very very few super-wealthy people serve prison time. Most don't even get convicted. "The advertisement said the truck was 'In Motion', nothing more"... It's clear this is something they've thought out in advance.
  - gamblor956 6y ago
    True, but the ones who became wealthy because of their criminal acts are the ones who get convicted and end up in prison. In large part, this is because the government(s) can and do freeze assets related to financial crimes and frauds. The ones that used their wealth to avoid conviction for non-financial crimes (see the UK sex scandal ongoing right now) generally avoid conviction by spending lots of money on legal defense, which they can do because their assets were not frozen. In this case, if the guy's wealth comes from securities fraud, he won't be able to use it to defend himself because his assets will be frozen.
    - ogre_codes 6y ago
      Milton's was already fairly well off due to his previous smoke and mirrors/ failure to deliver dHybrid. "dHybrid landed a truck-conversion deal with Swift Transportation, leading to a mid-2012 lawsuit predicated on dHybrid's failure to deliver on its agreement.[6] dHybrid would eventually be purchased by Worthington Industries in 2014[7] and, in 2015, Milton founded Nikola Motor Company with his brother, Travis, as the director of operations with a background in construction and remodeling." He has plenty of assets to defend himself and clearly knows how close to the edge of the truth he can get and get away with it.

person_of_color 6y ago

He made $70 million already. What's the likelihood he keeps it?

mlindner 6y ago
In cash? Or loans with his stock as collateral? He was taking loans with his stock as collateral to buy more stock. I'm not sure he actually has any money at all once everything rinses out.

sidcool 6y ago

They did produce a truck didn't they? So what happened? Did they run out of cash? Was the product never built? What's the deal?

tacticalDonut 6y ago
They've not yet produced a functioning truck. The one they made can't actually move and might not be anything more than a mostly empty shell.

sidcool 6y ago

How did they get GM to invest $2 bn?

swarnie_ 6y ago
> The tie-up sent Nikola’s shares surging by 51% and GM’s by 10%. Credit Suisse called it “a crucial validation datapoint on the GM EV strategy.” That's 4bn of share price return for a 10 yea, 2bn partnership. Presumably they'll now parachute there own execs in there to try and salvage something.
mrep 6y ago
GM didn't invest 2 billion. GM got 2 billion in stock, 700 million in cash and a bunch of other stuff mentioned here for the deal: https://news.ycombinator.com/item?id=24546221 https://news.ycombinator.com/item?id=24546221

dcchambers 6y ago

So this is basically Theranos but for automobiles. Have we learned nothing?