The founder of an electric truck company is expected to face significant prison time when he is sentenced on Monday in a fraud case that highlights the financial carnage left behind by a crop of electric vehicle start-ups and their promoters.
A federal judge in Manhattan will sentence Trevor Milton, the founder and former chief executive of the truck company Nikola, after a jury found him guilty last year of one count of securities fraud and two counts of wire fraud. Mr. Milton was accused of pumping up the value of Nikola stock by making extravagant claims about the company.
Mr. Milton told investors that Nikola had working prototypes of emission-free long-haul trucks, had billions of dollars’ worth of binding orders and was producing low-cost hydrogen fuel. All those statements were false, said prosecutors, who have asked the judge to hand down an 11-year prison term and a $5 million fine. Lawyers for Mr. Milton, who denied the charges, asked that he be sentenced to probation.
Few electric vehicle executives have been convicted of crimes, but Nikola was hardly the only new auto company to attract billions of dollars of investment without generating profits or producing many cars or trucks, leaving shareholders with huge losses.
Inspired by the success of Tesla, investors poured money into start-ups like Canoo, Lordstown Motors and Lucid Motors in recent years. Their backers and executives viewed electric vehicles as a chance to challenge established automakers like Ford Motor and General Motors — and become rich in the process.