Canoo Q2 2022 report: $1 billion in sales pipeline, but only $33.8 million in cash left

American EV startup Canoo shared its latest report outlining its results for Q2 of 2022 as it continues to fight to stay out of the red in a race toward production. Canoo is now reporting another big loss for the quarter. And, although it has $1 billion in its sales pipeline, only a minority percentage of those commitments are binding under contract.

Canoo ($GOEV) is an LA-based EV startup founded in 2017 by two former employees of Faraday Future. The automaker has several EVs in the works but plans to launch its Lifestyle Delivery Vehicle (LDV) first.

A modified version of the Canoo LDV was chosen to transport future astronauts on the Artemis Missions to the launch pad under a contract recently awarded by NASA, and Walmart signed a contract in July to order up to 10,000 LDVs beginning with priortized deliveries in Q1 of 2023.

This was welcomed news following Canoo’s Q1 report, which posted a $125M net loss and “substantial doubt” the startup could continue. Canoo worked to lean out this quarter, readjusting its production strategy while continuing to test its LDV for road certification as it scrapes its way toward SOP.

Three months after its troubling Q1 report, Canoo is still fighting and has some promising sales in its order book, but Q2 also includes another big net loss, leaving the startup with even less runway to work with.

Canoo Q2

Canoo reports a $164.4 million loss in Q2 of 2022

According to its press release coinciding with its Q2 2022 investors presentation, Canoo has posted a net loss of $164.4, up from $112.6M in Q2 of 2021. Additionally,  Canoo shared it has cash and cash equivalents of $33.8 million as of June 30, 2022. Canoo chairman and CEO Tony Aquila spoke during the call:

We have more than $1 billion in our sales pipeline which includes our recently announced commercial order. We have successfully completed 90% of our structural crash testing in the quarter and are now moving to the final phase of Federal Motor Vehicle Safety Standard certification. We have navigated a tough global economic backdrop in the first half, and will continue to take a disciplined, long-term, strategic and focused approach to deliver on our announced built in America vehicles, which are for and by America first with the intent of making EV’s available to everyone. We have also introduced phase one of our just in time, milestone based approach to accessing the capital markets which aid us as we continue to build on access to non-dilutive capital. We are advancing to Start of Production in Q4 and, our product resonates with the most discerning customers.

The $1 billion in potential sales is encouraging, but according to Canoo, only 5,500 (17%) of the units that have been spoken for are committed sales under contract. The other 27,000 EVs on order are refundable and non-binding.

Still, the company remains optimistic based on these prospective orders and continues to say it has access to more capital via the following methods:

  • Entered into a $300M Pre-Paid Advance Agreement (PPAA) with Yorkville Advisors
    • Canoo has drawn its first $50M advance
  • Filed an At-The-Market (ATM) offering program for $200 million
  • Filed an additional $300 million universal shelf registration

In addition to the $33.8M in cash and cash equivalents, the EV startup claims it has access to approximately $220 million of unused capacity from a Standby Equity Purchase Agreement (SEPA) filed with the SEC this past May.

Looking ahead, Canoo is sharing the following business outlook for the rest of 2022 as it still aims for a start of LDV production in Q4 2022:

  • Operating Expenses (excluding stock-based compensation and depreciation) of $200M to $245M
  • Capital Expenditures totaling $100M to $125M

Here’s a link to Canoo’s entire Q2 2022 presentation.

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