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Canoo is emphasizing commercial vehicles, rather than cars for consumers.

Courtesy Canoo

The electric vehicle start-up Canoo reported unsurprising fourth-quarter results Monday evening, but news from the company’s earnings conference call has the stock tanking.

Canoo (ticker: GOEV) shares were down almost 25% in early Tuesday trading, hitting a new 52-week low at about $8.90 a share. That is below the $10 where Canoo’s deal to merge with a special purpose acquisition company was struck.

The S&P 500 and Dow Jones Industrial Average, for comparison, were both down less than 1%.

The company is changing its strategic direction. That has investors nervous and is hitting the stock.

“It was decided by our Board to de-emphasize the originally stated contract engineering services line, and this will further accelerate the creation of [intellectual property] and the launch of our [vehicle] derivatives which enhance our opportunity for the highest return on capital,” Executive Chairman Tony Aquila said on the call.

Cutting engineering services isn’t all that’s changing. Canoo was going to offer consumers subscriptions for its vehicles, but now the focus is on traditional sales. And the consumer vehicles Canoo originally built its plans around are being de-emphasized. Now, Canoo will focus on commercial vehicles such as delivery vans.

Canoo also withdrew the financial forecasts from the presentation detailing its SPAC merger. The company had predicted $2.3 billion in 2025 sales, with $1.2 billion coming from the engineering services that are now effectively discontinued.

Roth Capital analyst Craig Irwin called the business model shift a “hard pivot” and downgraded shares from Buy to Hold. He cut his price target to $12 from $30. “Canoo had an eventful call for its first post SPAC-IPO results,” wrote Irwin in his research report.

Irwin is one of two analysts covering the company now. Roth launched coverage in December with a Buy rating, although the call wasn’t being picked up by the ratings aggregation service FactSet. One reason for the confusion is that it is hard to keep up with SPACs. Irwin launched coverage before the merger was complete and before the stock symbol changed from “HCAC” to “GOEV.”

The other analyst providing coverage is R.F. Lafferty’s Jamie Perez. He still rates shares Buy and has a $30 price target. He launched coverage on March 11, after the SPAC merger closed.

The change in strategic direction, and to a lesser degree, the confusion over analysts’ research, are a reminder to investors that SPACs have additional risks compared with other stocks. Management teams at newly merged SPACs, for instance, can turn over quickly. Canoo announced four new executives, as well as the exit of CFO Paul Balciunas, on Monday.

That was something else for investors to digest. Based on the stock-price reaction, it was too much.

Write to Al Root at allen.root@dowjones.com