Trevor Milton, founder and executive chairman of hydrogen-electric truck startup Nikola, announced Monday he is stepping down from his position, effective immediately. Milton's departure comes nearly two weeks after a bombshell report from financial analysis firm (and Nikola short-seller)of being an "intricate fraud."
Along with a company announcement, Milton released a personal letter noting the "wonderful experience" he had building Nikola and reiterated that he approached Nikola's board of directors to voluntarily step down. "The focus should be on the company and its world-changing mission, not me. We have to keep our eye on the target and deliver without distractions," he wrote. He also said that Nikola's CEO, Mark Russell, who remains in his position, has long been Milton's "handpicked" successor and that the company's in good hands.
Replacing Milton as Nikola's chairman is Stephen Girsky, who served as vice chairman of General Motors in the past. Russell and Girsky said in their own statements they will work together to execute goals "to become a vertically integrated zero-emissions transportation solutions provider."
Nikola shares dropped 28% in premarket trading following the news Monday morning though rallied a little later in the day to a 19% loss.
Milton, long the outspoken face of the startup company, promised to defend the company against the allegations published in the Hindenburg report, though in a rebuttal to the report, Nikola admitted that its first semi truck, the One,. Milton himself assured reporters at the One's reveal the truck was "not a pusher." Hindenburg's research found that the company allowed the semi to roll downhill and filmed the scene with camera tricks to make it appear as if the One traveled at high speeds with a hydrogen-electric powertrain. The truck also reportedly never even housed its promised powertrain that Nikola said it worked on for years.
By and large, the report accused Nikola of never having anything of value and instead, Milton and leaders fleshed the business out through over-promising features and inflating worker experience, among other things.
Since the report's publishing, Nikola announced that it approached the US Securities and Exchange Commission. The SEC has since confirmed that Nikola is, and reports indicate that the US Department of Justice has as well.
As the drama continues to unfold, GM remains caught in the middle. Just a day before Hindenburg published its report filled with text messages, emails and photo evidence to back up its accusations, the US automaker trucks.to engineer and build the . With the deal, GM will also provide Nikola its and fuel cells for its semi
The deal rang as a curious one then, and remains a tad odd. It's unclear what GM receives in the transaction aside from the ability to associate itself with the hype Nikola built for the past few years. It also calls into question what Nikola does have to offer internally if GM will provide EV batteries and fuel cells -- two elements Nikola has long promised will be built in-house.
Reacting to Milton's departure, GM said in a statement, "We acknowledge Trevor Milton's departure from Nikola and the decision of the Nikola board to move forward. We will work with Nikola to close the transaction we announced nearly two weeks ago to seize the growth opportunities in broader markets with our Hydrotec fuel cell and Ultium battery systems, and to engineer and build the Nikola Badger. Nikola,and other companies who are looking to GM's technology as a platform for their products, represent just one part of our overall EV strategy. Our overall goal is to put everyone in an EV and accelerate adoption."
Milton, as part of his separation package, is giving up $166 million in stock and an additional $20 million in consulting fees. That's a healthy chunk of change, but it pales in comparison to the $3.1 billion in stock he is leaving the company with, according to CNBC.
First published Sept. 21 at 05:57 a.m. PT.