EV startup Canoo under SEC investigation

Image: CanooThe Securities and Exchange Commission has opened an investigation into newly public electric vehicle startup Canoo, CEO Tony Aquila shared on a conference call on Monday. “We recently received a notice from the SEC that they are conducting...

EV startup Canoo under SEC investigation

The Securities and Exchange Commission has opened an investigation into newly public electric vehicle startup Canoo, CEO Tony Aquila shared on a conference call on Monday.

“We recently received a notice from the SEC that they are conducting an investigation,” Aquila said, who added that the agency “characterized the process as a fact-finding inquiry.” Aquila did not share any more information about what the probe involves.

Canoo is one of a number of electric vehicle startups that went public by merging with a special purpose acquisition company (or SPAC) over the last year. These mergers provided a different path to these startups compared to a traditional IPO. But since these mergers are regulated differently, it’s given startups more leeway when it comes to their business projections. In April, the SEC said it would start taking a closer look at this discrepancy to make sure that investors weren’t being misled.

Canoo is not the only EV startup facing pressure from the SEC and other regulators. Lordstown Motors disclosed in March that the SEC is investigating whether the electric pickup truck startup misled investors. Hydrogen trucking startup Nikola also faces investigations from the SEC and the Department of Justice after being caught lying to investors.

Aquila stressed on the call that Canoo has been overly conservative with its projections to date, and also said the startup will be careful when reporting total deposits for its vehicles versus binding orders. The startup began taking deposits for its electric van, pickup truck, and delivery vehicle earlier Monday.

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