Electric vehicle maker Canoo Inc. (Nasdaq: GOEV), which is moving its headquarters to Bentonville, narrowed its losses in the fourth quarter while cash remained tight.
The company on Thursday afternoon reported losses of $80.2 million, less than the $138.1 million loss it posted in the same quarter the previous year. On a per-share basis, the loss came to 25 cents.
For the full year, Canoo's losses widened from $356.8 million to $487.7 million. The company warned investors in the first quarter that its financial situation had created substantial doubts about whether it could stay in business.
During an earnings call Thursday, Canoo CEO Tony Aquila said the firm is moving past what he called “legacy matters” and is in a realignment phase where strategy will shift from a “just in time” funding approach to one that is measured out via targeted milestones. That approach will "make more efficient use of capital," Aquila said.
A U.S. Securities and Exchange Commission investigation into the firm, which resulted in a $1.5 million fine, is nearly resolved, Aquila said. That investigation revolved around Canoo’s merger with Hennessy Capital Acquisition Corp, a special purpose acquisition company.
The transition away from legacy matters “has been expensive for associates and all stakeholders,” Aquila said. “We are increasingly excited about the direction of the company. Legacy matters have been a big distraction. It ends a significant chapter from the company’s past management and paves the way to focus entirely on the future.”
The CEO said he expects the company’s Oklahoma manufacturing facilities to produce 20,000 vehicles by the end of 2023. He said about 65% of the equipment needed for assembly lines is now on the ground, and with what is in transit, 85% will soon be in Oklahoma.
Canoo finished 2022 with $36.6 million in cash and cash equivalents, up from $6.8 million the third quarter but well bellow the $224.7 million it had at the end of 2021. Executives said there are $2.8 billion in orders in the pipeline, representing a more than 300 percent increase in 2022 compared to the previous year.
It raised another $52.5 million in February by selling discounted stock, bringing its cash to about $89.1 million. That's just above the company's projected minimum expenses and capital expenditures in the first quarter. Guidance shows $85 million to $115 million in expected spending.
Canoo will explore more diversified funding sources this year, executives said.
A partnership with WalMart Inc. where Canoo will provide 4,500 vehicles for final mile deliveries, is "moving at or above original expectations," Aquila said. "It is going fine," he said. "They are here working with us. We have a robust delivery schedule we are trying to taper back to deliver to other customers as well."
"We will be delivering vehicles to them [WalMart]," he said. "As for the schedule, they will announce that shortly as part of their bigger fleet strategy."
Canoo has shifted more than 90% of its supply chain to the U.S. or allied nations, a move that positions the company to receive domestic manufacturing incentives for electric vehicles. Decoupling from China has proved more difficult than expected.
Canoo “struggled with the transition and timeline” of sourcing components because of the firm’s “China exposure,” Aquila said, adding that diversifying supply chains led to manufacturing delays.
The EV maker is expanding internationally. It signed an exclusive distribution agreement with GCC Olayan for vehicles in Saudi Arabia. The company's geographic expansion strategy will be clarified in coming quarters, Aquila said.
coming quarters, Aquila said.
Shares of the company were down 7% in after-hours trading Thursday. Year to date, shares are down 50%.
Arkansas Business will update this story.