A rendering of Canoo's manufacturing facility in Oklahoma City
Canoo Inc., the electric vehicle startup that’s relocating to Bentonville, announced Wednesday that it’s purchasing a 630,000-SF manufacturing facility in Oklahoma City as it moves toward scaled production.
The announcement came along with the company’s results for the third quarter, during which its losses widened and available cash continued shrinking. The company started the year with $224.7 million in cash and cash equivalents, but was down to just $6.8 million for the period ending Sept. 30.
Canoo (Nasdaq: GOEV) warned investors in the first quarter that its financial situation had created substantial doubts about whether it could stay in business. Since then, it has accessed additional capital through what CEO Tony Aquila calls a “just-in-time, milestone-based” approach, one that he acknowledged can be “painful” for stakeholders but has repeatedly said will pay off in the long run.
Wednesday’s results included news that Canoo had secured access to another $200 million in capital through an “at-the-market offering” program.
“The last two quarters have been very tight,” Aquila said in an earnings call. “The macro economic has worsened, pushing the cost of capital higher and forcing us to accelerate our maturity and manage costs efficiently to achieve our goals. We have been doing our best to manage cash, continued access to liquidity and dilution.”
The company recorded a net loss of $117.7 million in the quarter, up 45.6% from the same period a year ago.
Meanwhile, Canoo’s sales pipeline grew to more than $2 billion, boosted by big orders from Walmart and fleet providers Kingbee Rentals LLC of West Valley City, Utah and Zeeba Co. Inc. of Los Angeles. The three agreements are for a total 19,250 of Canoo’s electric SUVs, called Lifestyle Delivery Vehicles.
That’s where the manufacturing facility in Oklahoma City comes in. Canoo said the facility will have a workforce of 500 and an annual production capacity of up to 20,000 vehicles by the end of 2023. It plans to double production capacity at the 120-acre site by the end of 2024.
The start of production is set for Nov. 17.
Aquila said the Oklahoma City site was chosen as part of a long-term plan to develop defense and specialty products, such as the astronaut transport vehicle it’s making for NASA and the experimental “Screaming Eagle” vehicle it’s delivering soon to the U.S. Army. The U.S. Department of Defense has a presence in the city, along with defense and aerospace companies including Boeing, Lockheed Martin and Northrop Grumman.
Aquila said production at that site is not planned to overlap with production at its “mega microfactory” being built in Pryor, Oklahoma. The 400-acre campus will be near a 100,000-SF battery module production facility announced last week.
Between Canoo’s investments in Oklahoma and Arkansas, an estimated 3,400 jobs will be created. Aquila said the states and local partners have offered Canoo $485 million in total incentives. He said the company is positioned to benefit from the Inflation Reduction Act, as well, which includes billions of dollars in incentives for domestic electric vehicle manufacturing. Canoo’s platform is 92% sourced in the U.S.
“We’ve moved our development of our software in-house, we’ve taken away anything to do with China,” he said. “We’ve done all this stuff over the last 20 months. And I think someday, we’ll be seeing [rewards] for it.
“We’ve just got to prove this next phase and probably the phase after that.”
Canoo shares were down 10% at market close Wednesday, but bounced 5% in after-hours trading. For the year to date, shares were down 85%.
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