A leaked 2016 Nikola business plan has suggested that the company was using customer deposit money to fund its operating expenses after it claimed in 2018 it "hadn't spent a single dollar" of the deposits.
The document also suggests that Nikola may have planned on continuing to use deposits for operating expenses, according to Business Insider. The deposits included reservations for the company's Nikola One semi, which short sellers alleged several months ago wasn't nearly as "fully functioning" as Nikola founder Trevor Milton made it out to be at the time.
The 2016 business plan, according to BI, stated: "At this time, we do not plan to hold reservation payments separately or in an escrow or trust fund or pay any interest on reservation payments. We generally use these funds for working capital and other general company purposes."
Shortly thereafter, Nikola refunded all of its customer deposits in 2018. This oddly-timed decision was pointed out in Hindenburg Research's critical report on the company back in September. Prior to Nikola CFO Jonathan Spira departing, the company claimed to have 7,000 pre-orders with deposits for a "total potential value of $2.3 billion," Hindenburg noted.
The former CFO sued Nikola in March 2018, after leaving the company. It was a month after Nikola's former CFO filed the lawsuit against the company that Nikola "suddenly announced" it was refunding all of its deposits. The lawsuit is sealed.
Nikola said in an April 2018 tweet: "We don't use your money to operate our business. We want everyone to know we have never used a dollar of deposit money in the history of our company."
Great news! All reservations will be refunded 100% and you won't lose your place in line. We don't use your money to operate our business. We want everyone to know we have never used a dollar of deposit money in the history of our company. All deposits will be refunded < 60 days— Nikola Motor Company (@nikolamotor) April 4, 2018
The company then tried to explain its actions in a poorly spelled Tweet, where it said it was collecting deposits just to make sure people "were serious enough" to pay them:
We collected deposits to ensure we had a viable business case with customers. Once we knew they were serious enough to pay depoaits, we decided to refund the money. It's not an attack on anyone or any company. Hope that helps!— Nikola Motor Company (@nikolamotor) November 6, 2018
Nikola gave BI the following comment in response to their report, which did nothing to address the deposits or the lawsuit:
"At Nikola, we are focused on moving forward and executing on our strategic initiatives. Today, we have a clearly articulated roadmap to enable our customers to integrate next-generation truck technology, hydrogen-fueling infrastructure, and maintenance. With this ecosystem, Nikola and its strategic business partners can lead the way as global leaders in zero-emission transportation."
Recall, among the bolder accusations made by Hindenburg Research in their scathing report about Nikola Corporation in September was the allegation that Nikola faked its Nikola One semi truck "in motion" video, which appeared to show a functioning big rig barreling through the desert, trailer in tow. Nikola later admitted that the video was simply a truck rolling down a hill.