Manufacturer Nikola has admitted a promotional video on YouTube shows its hydrogen-powered lorry rolling downhill rather than moving under its own power.
The video, posted by founder Trevor Milton in January 2018 and viewed more than 260,000 times, appears to show the lorry driving along a desert highway.
Nikola denied misleading investors and false advertising, adding a working lorry had been filmed in 2019.
The US Securities and Exchange Commission is investigating.
Nikola said it had “contacted and briefed” the SEC and intended to fully co-operate with its inquiry.
The 2018 video was accompanied by the text: “Behold the 1,000 HP zero-emission Nikola One semi-truck in motion.”
But the company has now admitted although the lorry’s gearbox, batteries and other components were functional, it did not have a working hydrogen fuel cell.
“As Nikola pivoted to the next generation of trucks, it ultimately decided not to invest additional resources into completing the process to make the Nikola One drive on its own propulsion,” it said in a 2,700-word response to a report from Hindenburg Research it said was “false and defamatory” and designed to benefit so-called short sellers – investors who bet a stock will drop in price – including Hindenburg itself.
Nikola also admitted it had used a third-party inverter, a key electrical component, and concealed it with a sticker in a video.
But it said this was “common practice” among vehicle manufacturers, adding it was designing, engineering and working on its own inverters.
The company is building a factory in Arizona and plans to start production of a battery-operated electric lorry by the end of 2021.
And in 2022, it will begin production of its Badger pickup van, which will use hydrogen fuel cells supplied by General Motors, as will its planned articulated lorries.
Shares in Nikola and GM have dropped in price since the Hindenburg report’s publication.
And Nikola is now threatening legal action against the research company.