Canoo (GOEV) now has a million-dollar reason to pull off its EV production strategy at Oklahoma City plant

EV startup Canoo (GOEV) has been battling all year to bring its “breakthrough” electric “lifestyle vehicles” to market. The company now has up to a $1 million incentive to manufacture new EVs at its Oklahoma City plant, but there’s a caveat.

Founded in 2017, Canoo has raced into the EV market with big expectations. Although, like many EV startups, Canoo quickly began burning cash without a full-scale production vehicle.

After posting a $125 million loss in the first quarter of 2022, Canoo expressed “significant doubt” it would be able to continue operations. However, since then, the EV startup has signed several supply agreements, including an order for up to 10,000 “lifestyle delivery vehicles” from retail giant Walmart.

Demand for Canoo’s electric vehicles continued building throughout the year, reporting over $2 billion in orders, with $750 million binding in the third quarter.

Until now, Canoo has been contract-manufacturing its EVs with production capabilities capped at around 10,000 units. In its next phase, Canoo plans to manufacture in-house, with the ability to scale production as needed.

Canoo announced in November it was ready to begin EV production after selecting a 630,000-square-foot move-in-ready plant in Oklahoma City. This week, the city council approved a partnership with Canoo that can earn the EV startup up to $1 million in incentives.

Canoo is set to receive $1 million if it delivers on its EV plan

After announcing Oklahoma City as its future EV manufacturing home, Canoo said its new facility would employ more than 500 people and be equipped to achieve a 20,000 unit run rate annually by the end of next year.

Oklahoma City Mayor David Holt posted on Twitter, saying if Canoo delivers on its job creation promise, the EV startup “can receive up to $ 1 million in incentives from our voter-approved fund that can only be used for economic development.”

Mayor Holt adds that although Canoo is planning to produce EVs in Oklahoma City by next year, if it doesn’t come to fruition, nothing will happen, and the fund will remain untouched.

However, if Canoo does pull through like all of us are hoping, the company will receive its incentive, and Oklahoma City will gain “hundreds of high-paying manufacturing jobs in a growing sector of the modern economy.”

Despite another over $100 million loss in the third quarter, Canoo says it can raise capital if needed. In addition, Canoo believes its “Made in America” focus has positioned it favorably to earn incentives from the Inflation Reduction Act, touting itself as one of the only companies that can take advantage of them immediately.