What happened

Shares of embattled electric-truck start-up Nikola (NASDAQ:NKLA) were sharply lower on Wednesday after reports that the company's talks with potential partners, including BP (NYSE:BP), have stalled in the wake of allegations that the company and its founder misled investors. 

As of 2:15 p.m. EDT, Nikola's shares were down about 18.9% from Tuesday's closing price.

So what

As first reported by The Wall Street Journal, Nikola's negotiations with several potential partners, including BP, about plans to build hydrogen refueling stations stalled after short-seller Hindenburg Research released a report casting doubt on the company's claims about its technology. 

Nikola's talks with BP were in an advanced state when Hindenburg's report was published, with the two parties having come to an agreement in principle, Bloomberg subsequently reported. Per Bloomberg's report, Nikola had hoped to announce a deal with BP shortly after it announced a separate deal with General Motors (NYSE:GM) to make its electric-pickup truck. 

A red Nikola Two, an electric semi, is shown puling an Anheuser-Busch trailer.

Nikola was close to a deal with BP to build a network of hydrogen refueling stations for its fuel-cell trucks when it was accused of misleading investors. Those talks have now stalled, The Wall Street Journal reported. Image source: Nikola Corporation.

The construction of a network of hydrogen refueling stations is a cornerstone of Nikola's business plan. The company plans to offer electric heavy trucks powered by hydrogen fuel cells to commercial-fleet customers via leases, with maintenance costs and refueling at Nikola's stations bundled into the leases. 

To support that plan, Nikola is aiming to build a network of about 700 refueling stations in North America over the next 8 to 10 years, the company said in March. 

Now what

Nikola -- and the auto investors who own the stock -- have been reeling since Hindenburg's report was published. The company, along with now-departed founder Trevor Milton, faces an investigation by the Securities and Exchange Commission. The U.S. Department of Justice has also reportedly made inquiries into the case. 

Now it's up to CEO Mark Russell and the company's new chairman, Stephen Girsky, to pick up the pieces. I expect that investors will hear more about their plan for a post-Hindenburg Nikola soon. 

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