Electric big rig startup Nikola received a $4.1 million loan from the Small Business Administration’s Paycheck Protection Program (PPP) meant to help small businesses keep people employed during the COVID-19 pandemic, according to an April 15th filing with the Securities and Exchange Commission. It’s at least the third EV startup to receive money from the PPP, following Faraday Future (which got a $9.1 million loan) and Workhorse (which got a $1.1 million loan).
The loan, which can be forgiven as long as Nikola hangs on to most of its employees, comes a little more than one month after the startup received a $525 million investment and announced it was becoming a publicly traded company. That move made gave founder Trevor Milton a net worth of more than $1 billion, according to CNBC, which first reported the news of the loan.
Nikola has been developing hydrogen and battery-powered big rigs since Milton founded the company in 2015, and last year it struck a deal with European manufacturer Iveco to mass-produce one of those trucks. But the Arizona startup is also known for the $2 billion lawsuit it filed against Tesla in 2018, which alleged that the electric big rig being developed by Elon Musk’s company violated Nikola’s design patents.
That lawsuit has dragged on for nearly two years, but on April 20th, Milton tweeted that Tesla lost a bid with the the US Patent and Trademark Office to invalidate some of the patents. “Two billion dollar lawsuit moving forward. We will defend our company’s IP no matter who it is,” he wrote.
Milton tweeted on Wednesday that the PPP loan will help cover the payroll of Nikola’s more than 300 employees for about two months. He also took issue with CNBC’s reporting of his net worth (saying that it’s tied up in stock that he can’t sell) and his recent purchase of a $32 million ranch.
“Yes I was the buyer [of the ranch], but I owe a full mortgage. 28+ million. If our company doesn’t succeed I lose everything in life like so many others,” he wrote. “I’ve given so much to so many people and get hammered for it just because I built a great company that could use the PPP help.”
Banks have already loaned out the entirety of the $350 billion that was allocated for the PPP in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, though Congress is expected to approve another $300 billion infusion later this week. The program’s rollout was chaotic, and many small businesses across the country were unable to get the loans they need, despite banks giving them to big companies like Shake Shack. (Shake Shack ultimately said it will return the $10 million loan it received.)
“It is likely that Congress would have to go back a third time, given the best estimates suggest this is a $1 trillion problem,” Joseph Parilla, a fellow at the Brookings Institution’s Metropolitan Policy Program, told Vice.
Correction: This article incorrectly stated that Nikola became a public company last month. The startup actually announced it will become a publicly-traded company sometime in the second quarter of this year. We regret the error.