General Motors and Bosch said on Monday they were sticking to their alliances with Nikola Corp after the executive chairman of the electric and fuel cell truck startup stepped down following allegations of fraud.
Nikola founder Trevor Milton, whose company become a well known in the stock market over the summer, resigned as executive chairman on Monday after accusations by short-seller Hindenburg Research on September 10 that he made false claims about Nikola’s technology.
Milton has fought back, even after the U.S. Securities and Exchange Commission, and the Department of Justice stated they were looking into the company.
Nikola shares dropped 20% in trading Monday, and have lost over 45% of their value since September 8, when it announced an alliance to build electric and fuel cell trucks with General Motors.
Nikola’s alliance with General Motors, and earlier partnerships to develop fuel cell and electric commercial trucks with Bosch and CNH Industrial’s Iveco unit are important to the startup’s effort to regain traction. On Monday, Nikola said board member Steve Girsky, a former GM vice chairman, would take over as chairman.
Last week, Girsky defended the due diligence his company, VectoIQ, did before it bought Nikola in a reverse merger that took the startup public.
General Motors has agreed to build an electric pickup for Nikola and provide batteries and hydrogen fuel cells for commercial trucks. In return, GM was supposed to get a 11% stake in Nikola and payments of up to $700 million for assembling the Nikola Badger pickup.