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Nikola drops $2B patent infringement suit against Tesla

Looking ahead, startup builds backlog with intended order from USA Truck

Nikola Corp. has dropped its patent infringement suit against Tesla Inc. and lined up another customer for its battery-electric Nikola Tre Class 8 cabover. (Photo: Nikola Corp.)

Nikola Corp. has dropped its $2 billion patent infringement suit against Tesla Inc. after months of inactivity that led a federal judge to all but end the nearly 4-year-old case for the two companies.

The companies have agreed to withdraw all claims and counterclaims against each other, according to a joint filing Tuesday in federal court in San Francisco, Nikola (NASDAQ: NKLA)  confirmed Wednesday.

The case was already on shaky ground, facing a dismissal in U.S. District Court in San Francisco because the two companies stopped responding to the suit in which Nikola accused Tesla of infringing on patents for its hydrogen-powered Nikola One semi.

Watch now: Where those Nikola electric trucks are coming from

The Nikola One was quietly discontinued in late 2020. The design elements that Nikola claimed were stolen became irrelevant because Tesla (NASDAQ: TSLA) redesigned its preproduction battery-powered Semi tractor.

U.S. District Court Judge James Donato wrote in late September 2021 that Nikola “has dropped the ball, and this 2018 action is languishing without explanation or apparent good cause.”

The lawsuit stalled after federal prosecutors charged Nikola founder Trevor Milton with securities fraud, alleging he misled investors about the company’s prospects. Milton has sought to have the charges dismissed. He is free on $100 million bail pending trial scheduled for April in New York.

The Nikola case has been compared to Theranos. Its founder, Elizabeth Holmes, was convicted by a jury this week of three counts of wire fraud and one count of conspiracy to commit wire fraud for scamming investors in the blood-testing startup out of hundreds of millions of dollars. 

USA Truck signs letter of intent

Separately, Nikola continued to show progress after severing ties with Milton, who resigned from the company in September 2020. 

Nikola announced Wednesday its latest letter of intent to sell 10 of its Nikola Tre battery-elected Class 8 cabover tractors to USA Truck (NASDAQ: USAK) through its sales and service partner Thompson Truck Centers.  

Thompson will provide sales, service, maintenance and energy infrastructure required to operate the Nikola Tre BEV trucks, expected to be delivered in the first half of 2022. The agreement includes the option to purchase an additional 90 Nikola zero-emission trucks over the next two years.

Nikola delivered its first Tre units to Total Transportation Services Inc. in December. TTSI placed the first significant order for Tre, a mix of battery-powered and hydrogen fuel cell models slated for 2023.

Federal court shelves Nikola’s patent infringement lawsuit against Tesla

Nikola Motor claims Tesla infringed its truck patents, seeks $2B in damages 

The case against Nikola’s Trevor Milton: ‘Lied about nearly every aspect’

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Alan Adler

Alan Adler is an award-winning journalist who worked for The Associated Press and the Detroit Free Press. He also spent two decades in domestic and international media relations and executive communications with General Motors.