The Securities and Exchange Commission (SEC) has imposed a fine of over $700,000 on Kandi Technologies Group Inc., a Chinese company with its U.S. headquarters in Dallas. The fine comes as a result of the company’s misleading statements regarding the planned launch of passenger electric vehicles (EVs).
According to the settlement order, Kandi Technologies made statements in news releases and regulatory filings that created a false impression that it had met safety requirements for selling highway-legal EVs in the U.S. and that the sales were imminent. The SEC found that the company’s statements were misleading and determined that it had not satisfied the safety requirements.
Kandi America, which represents Kandi Technologies in the SEC investigation, stated that the company cooperated with the regulatory agency. While the settlement does not constitute an admission or denial of the SEC’s findings, the company is glad that the matter has been resolved.
Kandi America entered the North Texas market in 2020, opening its first U.S. sales facility in Garland. The company, previously known as a battery maker in China, expanded into auto manufacturing and aimed to bring their electric vehicles to the United States. Kandi America later moved its U.S. headquarters to a former Academy sporting goods store on Forest Lane along U.S. Highway 75.
The SEC’s order detailed a series of statements by Kandi Technologies regarding the approval of their vehicles for U.S. roads. The company claimed that its vehicles met National Highway Traffic Safety Administration standards and that it had a contract to supply its U.S. subsidiary with 2,000 EVs. However, no vehicles were delivered, and the SEC found that the company’s timelines were unrealistic and accompanied by misleading statements about necessary regulatory approvals.
As a result of these misleading statements, Kandi America had to pivot its strategy and market the EVs as low-speed neighborhood vehicles instead of highway-ready electric vehicles. Despite this setback, the company reported significant sales, with over half occurring in the U.S. and other countries.
Sources: SEC, Kandi Technologies Group Inc.