Canoo Drops Arkansas From Operations List

Canoo leased this 275,000-SF warehouse in Bentonville to begin initial domestic EV manufacturing. It never moved in, and is now making EVs in Oklahoma. (Michael Woods)

Electric vehicle manufacturer Canoo Technologies announced in November 2021 that it was moving its corporate headquarters from Texas to Bentonville and planning a research and technology center in Fayetteville.

“These and other investments will bring at least 545 high paying jobs to Benton and Washington counties,” the company said at the time. A few months later, Canoo signed a 10-year, $17.1 million lease on a 270,000-SF warehouse in Bentonville. It planned to begin initial domestic EV manufacturing there.

But on a weekday last week, the warehouse stood empty and locked. A sign read “Warehouse For Sublease.”

Canoo never moved in, a company official confirmed to Arkansas Business in a telephone interview Tuesday, because it couldn’t secure a second site it needed nearby to house its headquarters to Bentonville.

For now, the company’s priority is manufacturing EVs in Oklahoma, he said, though it still aspires to bring jobs to Arkansas.

The research and development hub in Fayetteville never got past planning, and Canoo dropped any mention of Arkansas from its news releases early this year.

That’s because the company “never pulled the trigger” on its plans to move to Bentonville, the company official said, speaking on the condition of anonymity.

“We do have aspirations to be manufacturing and doing other things in Arkansas, but the market obviously is very different today than it was a couple of years back,” the official said. “So we’ve had to just step back and reprioritize.”

Walmart Deal

In July 2022, Walmart Inc. announced plans to buy 4,500 Canoo delivery vehicles, and Canoo Chairman and CEO Tony Aquila suggested at the time that the association with Walmart would keep Arkansas in Canoo’s long-term future.

That is, if the company manages to have one.

Its stock has nosedived since it announced its headquarters plan in late 2021, and its lack of cash has required it to warn investors for eight straight quarters that it may not last as an ongoing concern.

The Arkansas Economic Development Commission has never had a signed agreement with Canoo, officials said.

“At this time, we recommend that any questions about Canoo’s headquarters and operational plans be directed to the company,” AEDC Executive Director Clint O’Neal said in an email.

James Bell, vice president of Bentonville Economic Development, said that he wasn’t involved in negotiations to bring Canoo to Arkansas, and hasn’t had contact with the company. “The best answer I have for you is that I was not involved in the deal,” he said. “That is a cool technology, and I love what they’re doing. I wish I had an answer for you, but I just don’t.”

Dwindling Cash

Canoo said in an April filing with the U.S. Securities & Exchange Commission that it does not have enough cash or other sources of liquidity to sustain planned operations for the next year.

The company had a net loss of $29 million in the fourth quarter, it said, and a $302.6 million loss for all of 2023.

Cash and equivalents were just $6.4 million on Dec. 31, the company reported, down from $36.6 million at the end of 2022.

Canoo is trying to raise capital, and in October announced that it had entered into a purchase agreement with a foreign strategic institutional investor for $45 million with potential additional investments up to $150 million.

The news release about the institutional investor said the company “has teams in California, Texas, Michigan, Oklahoma and Arkansas.”

But Canoo’s last nine news releases, since Jan. 24, have mentioned teams only in “California, Texas, Michigan and Oklahoma.”

Tumbling Shares

Canoo’s stock, listed on the Nasdaq exchange as GOEV, was trading above $280 per share in November 2021, but it hit a low of 21 cents shortly before a 1-for-23 reverse stock split took effect March 8.

The reverse split brought shares above Nasdaq’s minimum price of $1 per share, and shares rose to $4.34 on March 21 after Canoo announced that its Oklahoma City manufacturing facility had beeen designated a Foreign Trade Zone by the U.S. Department of Commerce.

At the end of April, GOEV was trading around $2.80. The stock is down nearly 84% over the past 12 months and down 98.7% over five years.

Jason Hall, co-host of the “Investing Unscripted” podcast and a contributor to the Motley Fool, discussed Canoo’s reverse stock split in a Jan. 13 episode.

“In a vacuum, the percentage that you own of the business stays the same because the total number of shares changes along with your number of shares,” Hall said. “The economic value of your interest remains unchanged.

“But obviously, when companies are doing this it’s because there’s problems,” he said. “In this case, because your stock has fallen so much it’s below what Nasdaq, the exchange that you trade on, is willing to accept for a stock to remain on the exchange.”

Some Plus Signs

Canoo has had some positives.

In January, the U.S. Postal Service agreed to buy six Canoo EVs as delivery vehicles, and the company sold three $120,000 “lifestyle delivery vehicles” to the state of Oklahoma, according to TV station KFOR.

Those three EVs, the station reported, were the first commercial motor vehicles manufactured in Oklahoma since 2005.

In November, Canoo said it had a deal for Prime Time Shuttle of Los Angeles to buy up to 550 premium EVs. Kingbee, a national work van rental company, took delivery of some Canoo LDV 130 vans and had them on the road in January, executives said.

Canoo previously delivered EVs to NASA and the U.S. military, the company said in various news releases.

“We are proud that an increasing number of our vehicles are on the roads of America,” Aquila said in a statement. “Our vehicles are engineered for service workers, and optimized for safety, reliability and comfort. This is what distinguishes our vehicles and provides a competitive edge for commercial fleet companies.”

Canoo’s April 11 8-K filing with the SEC listed the address of the company’s principal executive offices as 19951 Mariner Ave., Torrance, California.