It’s an exciting time for American EV startup Canoo (GOEV) as the company gears up to begin commercial production. After acquiring a new manufacturing facility in Oklahoma City, the company says it’s working on starting production on its own equipment this month.
Canoo (GOEV) lives another day
Canoo has overcome adversity all year. After barely skidding by in the first quarter, taking an over $125 million loss, and expressing significant doubt it will be able to continue, Canoo is on its way to begin commercial production of its flagship electric vehicle, the Lifestyle Delivery Vehicle (LDV).
Since the first quarter, the EV startup has made substantial progress, signing an agreement with Walmart to supply up to 10,000 electric LDVs, allowing Canoo to live another day.
Although Canoo saw its losses widen in the second quarter, the company continued looking ahead, citing over $1 billion in pipeline sales while reiterating its intent to start commercial production in Q4.
According to Canoo’s latest quarterly earnings filing, the company is on track for the start of production (SOP) on November 17, 2022, after orders doubled to over $2 billion ($750 million binding). The EV startup had several highlights in Q3, including:
- Walmart completed an initial order for 4,500 LDVs.
- Zeeba, a fleet solutions provider, ordered 5,500 Canoo EVs, with 3,000 under a binding agreement
- Rental van company Kingbee committed to buying 9,300 LDVs, with the option of up to 18,600.
Canoo’s announcement to begin EV production comes after securing access to new funding and acquiring two manufacturing facilities to produce its Lifestyle Vehicles, with expected deliveries to begin in 2023.
Canoo to begin EV production with new manufacturing facilities
After considering multiple locations, Canoo chose the Oklahoma City location because it was “an existing commercial site with more than 630,000 square feet of move-in ready space and significant room for further expansion.”
The OKC facility will be adapted for Canoo’s needs featuring a full vehicle assembly line with state-of-the-art-robotics, a paint shop, and an unfitting center. Tony Aquila, Canoo’s CEO state:
We are working with our third-party manufacturing partners to achieve SOP on our own equipment this month. Following these initial builds, we will aggressively shift all our equipment into our new facility during 1H’23 with production ramp in 2H’23.
In addition, Canoo is expanding its production capabilities with a new EV battery module manufacturing facility. Once at full speed, the plant will have around 3200 MWh of battery module capacity.
Despite another $117 million loss in Q3, Canoo says it has access to up to $200 million through an ATM offering program, which will allow the company to raise capital if needed.
The EV maker ended the quarter with just $6.8 million in cash, but as the company’s CEO states:
Our Made in America focus has positioned us favorably with the recently announced IRA bill, and we are proud to be one of the only companies, that can take advantage of these incentives immediately. Under the backdrop of a volatile market, we will continue to access the capital markets with our just-in-time, milestone-based approach.
Canoo expects operating expenses between $70 million and $90 million in Q4 as the company begins commercial EV production on November 17, 2022.
After running up to over $13 per share in November 2021, GOEV stock has come crashing back down to earth, down over 84% this year. Perhaps the start of EV production can charge up Canoo investors once again.
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