California Backed Nikola with more than $50 million in state truck subsidies, even after its former chief executive, Trevor Milton, was indicted on federal fraud charges. The California Air Resources Board allowed the company into its Clean Truck and Bus Voucher Incentive Project in 2022, according to a Los Angeles Times investigation.
State officials ultimately helped buyers purchase 166 Nikola electric and hydrogen-powered semis. The vehicles received more state funding per truck than any others bought through the program. The subsidies supported a now-bankrupt maker whose founder was later convicted of fraud.
California Backed Nikola After Milton’s Indictment
Federal prosecutors indicted Milton in July 2021, alleging he made false claims about nearly all aspects of Nikola’s business. Nate Anderson, founder of Hindenburg Research, said his firm’s 2020 fraud allegations helped spark federal investigations. Anderson criticized California for continuing to back the company.
Prosecutors accused Milton of securities fraud and wire fraud, saying he misled investors about Nikola’s technology, prospects and operations. At a 2016 product unveiling in Salt Lake City, Milton said the flagship Nikola One was fully functional. Prosecutors later said the prototype lacked a hydrogen fuel cell and electric motors.
A 2018 promotional video showed the truck traveling on a highway. Prosecutors said the video was misleading, and Nikola admitted the truck had been towed uphill before it rolled down a slope. Milton was convicted and sentenced to four years in prison in 2023.
California Said The Vehicles Remained Eligible
CARB said it knew about Milton’s legal issues but concluded they did not affect vehicle eligibility. A spokesperson said Milton had stepped down as Nikola chairman in 2020, more than a year before the first vehicle became eligible. The agency said his conduct did not affect the vehicles’ viability or performance.
The 166 Nikola trucks were a small fraction of nearly 12,000 clean trucks and buses deployed through the incentive program. State Sen. Tony Strickland called for more safeguards, transparency, accountability and oversight. He has long opposed California’s zero-emission vehicle mandates.
Environmental advocates also supported accountability, while warning against ending the broader program. Sam Wilson, a senior vehicle analyst with the Union of Concerned Scientists, said improved guardrails could help. Wilson said the goal was an accountable incentive program, not its demise.
Bankruptcy Left Truck Buyers Facing Uncertainty
Nikola filed for bankruptcy in February 2025, leaving customers uncertain about warranty protection and with limited access to parts and service. Long Beach-based King Fio Trucking bought Nikola vehicles with state incentives. Owner Jennie Abarca said she wanted the trucks to help reduce emissions in her community, but placed orders for 20 Tesla Semi trucks for her next purchase.
The company separately agreed to pay $125 million to settle Securities and Exchange Commission allegations that it deceived investors. After the bankruptcy filing, the payout was reduced to $48.8 million. Milton’s criminal case followed a separate path: prosecutors sought $675 million to $680 million in restitution, but a pending appeal ended after President Trump pardoned him in March 2025. Milton served no prison time and paid zero restitution.
The subsidy dispute sits alongside other cases examining alleged misconduct by startup leaders, including the fraud charges faced by Kalder’s founder, the guilty plea by Joonko’s founder, and SEC charges against a former CEO.
