Electric vehicle startup Canoo is under investigation by the United States Securities and Exchange Commission for the SPAC deal that took it public last year, as well as recent company dealings and the departure of several key executives, according to filings dated Monday.
"We recently received a notice from the SEC that they are conducting an investigation," said Canoo's recently appointed CEO and Chairman Tony Aquila. "They characterize it as a fact-finding inquiry," adding that company officials would not take questions from reporters about it, and that Canoo was, "committed to providing timely updates," about the probe. Canoo's filing stated the SEC is looking into the company's operations, business model, revenue strategy and customer agreements.
The company told investors Monday during its quarterly earnings call that it has cut losses and announced its lifestyle vehicle van, set to start production next year, will start at $34,750 and be one of the least-expensive new electric vehicles available in the United States. The premium model will go up to $49,950 for the Premium model of the van. Canoo also opened reservations for another van model and its pickup truck derivative.
Canoo's lifestyle vehicle van will start at $34,750.Image courtesy of Canoo
Canoo reported net losses of $15.2 million in the first quarter of 2021, compared to $30.9 million in the same period last year. Net operating cash rose to $53.9 million from $23.7 million, while capital expenditures jumped to $12.1 million in the first quarter compared to less than $1 million during the same time in 2020. Aquila said Canoo also repaid a $6.9 million Paycheck Protection Program loan from July 2020.
Share prices for Canoo closed on Monday at $7.55, up 3.42%, before falling by nearly as much in after hours.
After a relatively uneventful public debut in December following an SPAC agreement with Hennessy Capital Acquisition and $2.4 billion valuation, Canoo shares nearly halved by March before its pickup truck prototype was revealed and bumping up the stock. But those gains were erased by the end of that month when the company announced several high-level departures from its executive lineup. Co-founder Ulrich Kranz, previously of BMW, vacated the CEO post in April and was replaced by Aquila.
A deal with Hyundai Motor Group was also declared dead this spring. Canoo agreed in 2020 to develop an EV platform for vehicles that would be derived from the startup's own vehicle designs and be available for use on future Hyundai and Kia vehicles. The announcement caught Canoo investors and the South Korea-based company off-guard.
Prices for the MPDV delivery van unveiled last fall and the pickup truck announced in March will also be revealed later this year, but Canoo opened up reservations Monday to all three vehicles through its website. Customers are required to put down a refundable deposit of $100.
While the company announced back in March it would refocus on the commercial vehicle market and away from the initially planned consumer model, Aquila said Canoo will still offer a subscription model, although it would make up less than 20 percent of sales.
Canoo also said Monday it plans to produce between 500 and 1,000 vehicles by the end of 2022, with 15,000 units projected for 2023. Aquila says Canoo is taking a conservative approach with these estimates.
The company is entering the final rounds of securing a contractor for its first phase of manufacturing and plans to announce a company partner next quarter. It's also in the process of narrowing down a site for a U.S. production facility and will select two finalists by the end of June.
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