A once-promising electric truck manufacturer has filed for bankruptcy in the U.S., marking a dramatic downfall after its founder was convicted of fraud. The company, which had ambitions to rival Tesla, was once valued at over $30 billion but now faces over $1 billion in liabilities.
The company, known for developing hydrogen fuel and battery-powered trucks, saw its share price plummet after going public in 2020, following allegations that it had misled investors. A critical short-seller report at the time accused its founder, Trevor Milton, of orchestrating an elaborate fraud.
Milton stepped down in 2021 and was later sentenced to four years in prison in December 2023 for defrauding investors. He was also fined $1 million. The company itself agreed to settle claims with U.S. regulators for $125 million without admitting wrongdoing.
Despite efforts to recover, the company filed for bankruptcy protection in Delaware on Wednesday, stating it had only $47 million in available cash and would seek to sell its assets.
The company’s CEO, Steve Girsky, attributed the collapse to a broader downturn in demand for electric vehicles. “Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate,” he said. “Unfortunately, our very best efforts have not been enough to overcome these significant challenges.”
Milton had originally founded the company in 2014, making bold claims about its groundbreaking technology and securing what he described as billions of dollars in pre-orders. However, investigations revealed that some of the company’s promotional materials were misleading. A 2017 video purportedly showing a functioning truck was later exposed as a staged demonstration, with the vehicle simply rolling downhill.
During his trial, Milton insisted he had not intended to deceive investors, describing himself as an inexperienced CEO with a “tender heart.” However, prosecutors argued he had deliberately misled the public, with U.S. attorney Damian Williams stating, “Trevor Milton lied to investors again and again – on social media, on television, on podcasts, and in print.”
Despite efforts to continue operations after Milton’s departure, the company struggled financially, reporting losses of $481 million in the nine months leading up to September 2024.
