Billionaire’s car company gets $4.1m in small business stimulus cash

‘Nikola is a pre-revenue company with a lot of expenses and burn rate is high’

Nikola Motor Company has received $4.1 million (£3.3m) in Paycheck Protection Program funds, despite the company being run by a billionaire.

The company’s CEO, 38-year-old Trevor Milton, is worth a reported, $1.1 billion (£887.3m), but SEC filings show that Nikola Motor received the funds, intended to help small businesses pay their employees during the coronavirus pandemic.

The scheme has been recommended by officials at the White House to help struggling small businesses, but numerous companies valued at more than $1 billion (£808.3m) have taken part, according to CNBC.

Nikola Motor was recently valued at $3 billion (£2.4bn), when they announced they were going public, after a merger with VectoIQ, according to the outlet.

If the merger still goes through, the hybrid truck design company, will receive $500 million (£403.7m) in initial investment from investors, including ValueAct Capital.

In a statement to CNBC, Nikola Motor said that they intend to keep all their staff employed during this time, but needed cash quickly to make it possible.

“There’s a difference between a high valuation and having cash,” the company said.

“Nikola is a pre-revenue company with a lot of expenses and burn rate is high,” the statement continued. “Since PPP funds will be used to retain staff, the lifeline follows the spirit of the Act in that we’re preserving high paying jobs.”

Despite these claims, in 2019, Mr Milton spent $32.5 million (£26.2m) on a property in his home state of Utah, according to the outlet.

“I plan on picking up multiple other properties like this one in order to preserve Utah and offer a sanctuary for my family, friends and others to enjoy,” he told Mansion Global.

“I feel like my generation is asset light, wants smaller everything and is moving to cities, which is the opposite of what I wanted in life.”

According to a tracking project hosted by Johns Hopkins University, nationally there are upwards of 842,624 people who have tested positive for coronavirus. The death toll has reached at least 46,785.