Commercial electric vehicle company Canoo has entered into an agreement to acquire a vehicle manufacturing plant in Oklahoma City, the company announced Wednesday along with its third-quarter earnings. The news comes a week after Canoo said it would build an EV battery module manufacturing plant in Pryor, Oklahoma.
The new facility will be dedicated to producing Canoo’s electric Lifestyle Delivery Vehicle (LDV) and Lifestyle Vehicle (LV), an electric SUV. Canoo is still working on its “megamicro factory” in Pryor, but until it’s online, this new facility will help Canoo ramp up production and bring electric vehicles to market by 2023.
Canoo CEO Tony Aquila said the company expects to begin production of the LDV on November 17 and complete final certification in the first quarter of 2023. The goal is to build 15 production vehicles this year, which will go to customers. compromised like NASA and Walmart. .
The 120-plus-acre Oklahoma City facility has “production-ready infrastructure” and is “strategically located with easy highway and rail access,” according to Canoo Aquila. Canoo will adapt the facility to accommodate a full robotic vehicle assembly line, a paint shop and an upgrade center. Canoo said the facility will run on clean energy.
“Following these initial build, us Will after aggressively change everybody our equipment Y approach a our new installations during Q1 Y Q2 of 2023,” Aquila said Wednesday. “As us beginning production, wme suppose the first salable vehicle deliveries a occur in the back half of Q1 Y us Will ramp production in 2H 2023 a 20,000 units run Speed by year final.”
Aquila said that megamicro’s factory in Pryor is “a little behind due to economic reasons” but that when Canoo is able to transfer resources there, the startup will be able to double its run rate to 40,000 units by the end of 2024.
Longer term, the Oklahoma City facility announced Wednesday that it will focus on defense and specialty products production, Aquila said. In April, NASA selected Canoo to provide crew transport vehicles for manned Artemis lunar exploration launches, and in July, the US Army selected Canoo to supply electric vehicles for analysis and demonstration.
Canoo Third Quarter Financials
Canoo closed the quarter with cash and cash equivalents of $6.8 million. That’s down from $33.8 million in the last quarter and $224.7 million in the fourth quarter of 2021. In less than a year, Canoo has spent $217.9 million and is still not generating revenue.
Quarter over quarter, Aquila says Canoo’s cash burn is down 25% as the company continues to tweak its spending mix, increasing the ratio of capex to operating expense.
The company’s loss from operating activities totaled $109.4 million this quarter, and its GAAP net loss and comprehensive loss were $117.7 million.
Canoo says it also has access to $200 million through an “offer-to-market” program, but access to capital is not the same as having cash on hand.
“About him financing front, us to have insured a additional $30 million in a TUBE Y a Note a be converted a money either stock,” Aquila said, noting that the company is in the final stages of evaluating different financing options for the Oklahoma facility.
Canoo appears to be taking advantage of promises of future revenue to gain access to more financing and stay afloat.
After reporting earnings for the first quarter of this year, Canoo issued a warning of growing concern, saying it may not have enough funds to stay in business. Things picked up for the company in the second quarter, in part due to its deal with Walmart to sell 4,500 electric delivery vehicles. This not only secured future revenue for Canoo, but also gave the company another opportunity to pursue additional low-cost, non-dilution equity financing opportunities.
Since then, Canoo has also secured binding fleet orders from Kingbee and Zeeba to purchase 9,300 and 3,000 vehicles, respectively, with the option to increase to 18,600 and 5,450 vehicles, respectively. Canoo currently has more than $2 billion in total orders in the pipeline, according to Aquila.
“The latest two quarters to have condition very tight,” Aquila said. “the macro economic has got worse, entrepreneur the cost of capital higher Y forcing U.S a speed up our maturity Y manage costs efficiently a achieve our goals. Us to have condition making our better a manage money, continued access a liquidity Y dilution.”
Aquila said that while Canoo’s cash situation appears dire, he believes that having less access to cash has led to greater competitiveness and efficiency.
“Being can a to teach the crew here What a run a business in ‘just in time’ milestone capital it is a very disciplined Getting closer What a investor, No single What the President Y CEO,” said “me to know it’s it is painful. But, your to know, would do your Quite to give a young man business a batch of money, or would do your Quite to give it’s money established in milestones?”
Canoo revised its expense guidance for the remainder of the year, anticipating $70 million to $90 million in operating expenses, excluding stock-based compensation, and $30 million to $50 million of capital expenditures.
“Us are now in clue by a 40% reduction in operating bills by the second half of the year, which it is important gets better compared a a previously revealed projection of twenty% reduction,” said Ramesh Murthy, Canoo’s senior vice president of finance.
Canoo shares, which closed at $1.17, were up 3.42% in after-hours trading.