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Canoo Narrows Q4 Losses, but Stock Plunges 32% on Uncertain Outlook

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Electric vehicle startup Canoo Inc. (NasdaqCM: GOEV), which has announced plans to move its headquarters to northwest Arkansas, narrowed its losses in the fourth quarter of 2023 and the full year but saw shares plummet Tuesday on uncertain guidance for 2024.

The company, which has been burning through cash, projected revenue between $50 million and $100 million in 2024, with cash outflows of $45 million to $75 million. Where those figures actually land will depend on several factors, including the company’s supply chain consistency and workforce capability, CEO Tony Aquila told investors in an earnings call Monday.

“The reality of it is the goal posts are wide right now because they have to be,” he said. “Now granted, we could push. If we chose to deploy more capital, we could accelerate it, but our error rate would go up and our cost per unit would go up with it because you lose the advantage in your supply chain discipline, and you have to harmonize it.”

Shares of the company were down 32% Tuesday morning to $2.64, erasing some gains from a rally last month.

Canoo conducted a 1-for-23 reverse stock split on March 8 to regain compliance with the $1 minimum share price to be listed on the Nasdaq Capital Market, the lowest tier of the Nasdaq. Shares were trading at 9 cents before the split.

Canoo finished 2023 with just $6.4 million in cash and equivalents. The company has warned investors that there’s “substantial doubt about the company’s ability to continue as a going concern.”

Losses in the fourth quarter totaled just over $29 million, an improvement from the $80.2 million loss the company posted in the same period the previous year. Per share, the loss came to 4 cents.

For the full year, Canoo posted a net loss of $302 million, compared to a loss of $487.7 million in 2022. Losses narrowed on falling operating expenses, particularly research and development costs, which have dropped sharply as the company shifts toward scaling production. The company produced 22 vehicles last year, twelve of which were delivered to customers and 10 of which were allocated for demo and sales to international customers.

One of Canoo’s largest customers is Walmart Inc. of Bentonville, which ordered 4,500 vehicles in July 2022. Aquila told investors Monday that Walmart has been testing Canoo’s Lifestyle Delivery Vehicle for more than a year to “fine-tune how their rollout schedule will work.”

“We don’t just sell vehicles, we integrate to workflows … It’s very proprietary about how they [Walmart] are doing things and how they’re addressing their last-mile delivery and what they need, configuration and so on,” Aquila said.

Canoo announced in November 2021 that it planned to move its headquarters to Bentonville and open a research and development center in Fayetteville, creating more than 500 jobs. But since then, almost all of the news surrounding the company has focused on its expanding operations in the Oklahoma City area.

There was no mention of Arkansas on the company’s fourth-quarter earnings call. The company has not responded to questions about its plans for the state.

The Arkansas Economic Development Commission told Arkansas Business in February that the state has no incentives or fleet agreement with Canoo.

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