Electric fleet vehicle startup Canoo Inc. furloughed 23% of its workforce, around 30 workers, at its Oklahoma City facility last week.
Canoo manufactures what it calls “lifestyle vehicles” and “lifestyle delivery vehicles.” Included in its lineup are electric delivery vans, pickup trucks, and passenger vans. To date, the company has had high-profile orders from private, public, and federal entities such as Walmart (No. 7 on the FleetOwner 500: Private), NASA, and the U.S. Army.
In 2022, Canoo purchased the former Terex plant in Oklahoma City for $34.27 million with the intention that it would be its main vehicle production facility. The company also has another plant in Pryor that manufactures batteries.
According to a local outlet, the company's three-month furlough will not come with health insurance or pay, leaving workers with few options at the start of the holiday season. One anonymous source said most personnel affected were in the manufacturing department, as opposed to upper management and engineers.
A statement by Canoo said the decision was difficult but represented a “continuation” of its effort to consolidate in the U.S., and the company was “committed to supporting” impacted workers.
Oklahoma legislators have supported Canoo’s development in the state for multiple years with various incentives. After losing its bid to have Tesla build its Cybertrucks in the state, it managed to lure Canoo in 2021 with an incentive package worth over $300 million, including an agreement to buy 1,000 vehicles over five years. If the company hit certain goals and milestones, more money would come its way.
See also: Electric van, pickup maker Canoo produced no Q1 revenue
The furlough highlights Canoo’s recent financial troubles. Despite a second-quarter earnings report that saw reduced operating expenses, better quarterly EBITDA, and quarterly revenue of $650,000, the company is still burning cash and looking for more capital.
Some of that capital comes from its CEO, Tony Aquila. According to company filings in late October and early November, Canoo issued an Unsecured Grid Promissory Note with a company affiliated with Aquila called AFV Management Advisors for $850,000.
Part of the agreement allowed Canoo to request advances, which, as of writing, it had in three separate instances for a total of $2.9 million on top of the principal amount of $850,000. Interest will accrue on the principal amount at a fixed rate of 11% per annum, and the entire amount will be made payable on Oct. 18, 2025.
Canoo further entrenched itself with AFV Management on Nov. 5, when it entered into a Revolving Credit Facility Agreement and Security Agreement, under which AFV will provide up to $12 million in working capital advances.
On the same day, Canoo borrowed nearly $4 million to repay the money it had borrowed under the Oct. 18 note. AFV has also committed $2 million to additional advances under the Secured WC Facility for specific approved purposes, with additional advances subject to discretion.
Canoo hasn’t set a date for its third-quarter earnings, but its stock price (Ticker: GOEV) has been on a downward trend over the past three months, and of writing, the price sits at $0.39 per share, putting the company’s market capitalization just over $34.5 million.
