By Ben Foldy
Talks between electric-truck maker Nikola Corp. and several potential partners, including BP PLC, to build hydrogen-refueling stations stalled following allegations the company had misled investors, according to people familiar with the matter.
The setback is the first outward indication that the controversy around the report is impacting the startup's ability to execute its business plan.
Nikola executives felt they were making progress toward finalizing an agreement with at least one major energy firm, when short seller Hindenburg Research released a critical report casting doubt on the company and its statements about the readiness of its technology, the people said
The conclusion of this deal was put on hold, the people said, as Nikola scrambled to respond to the accusations outlined in the short seller's report, which the Phoenix-based startup has called false and misleading.
Potential partners have been reluctant to move forward amid the heightened scrutiny, but a deal could still come together, the people said.
Nikola doesn't comment on speculation and is continuing to work on potential partnerships, a spokeswoman said. A BP representativedeclined to comment.
The Securities and Exchange Commission and the Justice Department have opened inquiries involving those claims, The Wall Street Journal and others have reported. Nikola's former executive chairman and founder Trevor Milton resigned from the company Sunday.
--Sarah McFarlane contributed to this article.
Write to Ben Foldy at Ben.Foldy@wsj.com and Mike Colias at Mike.Colias@wsj.com