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Canoo Sticks to 2023 Production Target

April 4, 2023
The electric vehicle startup had a tough 2022, but executives expect factories to have a production capability of 20,000 by the end of year.

Electric carmaker Canoo will shift from R&D to focus more on manufacturing in 2023, hoping to further slash operating expenses following a 45% reduction last year, CEO Tony Aquila said. Executives expect operating expenses to be between $55 and $70 million and capital expenditures between $30 and $45 million, both reductions from 2022 goals.

“Migrating from an R&D design and premarket delivery to a manufacturing and market launch organization hitting these milestones will better help us manage the current market turbulence,” he said.

Ramping up production in 2023 means hitting a 20,000-unit run rate at its Oklahoma City factory, a number executives have held firm on since Q3. Canoo currently has a $2.8 billion order book, including 4,500 vans to be used as Walmart delivery vehicles.

Aquila’s affirmation of Canoo’s production target stands in contrast with Arrival, another EV commercial vehicle startup, which had to dial back its ambitions over the past year (On a related note, General Motors Corp.'s BrightDrop division will this year deliver the first 200 of 4,000 electric vans to Ryder System Inc.). But Canoo still has work to do: When asked about the current level of preparedness, Aquila said they were in the “65%-ish range of items on the ground, probably at north of 85% with what's inbound,” although they’d found a workflow that supported their confidence in achieving it.

Canoo announced its Q4 results on March 30, which showed it failed to generate any revenue in the quarter and experienced a comprehensive loss of $82 million, compared to $138.1 million in Q4 2021, and $487.7 million for the year, compared to $346.8 million last year. The company posted a going concern at the end of Q1, as it lost $125 million in the period and had less than that in cash left. Q4 also saw Canoo settle the SEC investigation into whether former senior executives had misled investors, and the company will pay a $1.5 million fine as result.

Despite the lows of the year, executives remained optimistic about the big picture. They delivered Canoo’s first light tactical vehicle (LTV) to the U.S. Army and entered a partnership with a Saudi Arabian distribution company. With the investigation wrapped up, Aquila said Canoo can now apply for government programs such as the “Department of Energy loan program and things of that nature.”

After reporting earnings, Canoo stock (Ticker: GOEV) fell from trading at $0.62 per share to $0.60 the following day, although it ended up rising to $0.69 that same day. Over the past six months, they have continued a general downward trend, currently trading 66% lower than the Oct. 2022 high. 

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