Despite a quarter that saw Texas-based EV start-up Canoo Inc. secure a deal with Saudi Arabian tourism company Red Sea Global and buy advanced manufacturing assets from failed rival Arrival SA, the manufacturer of delivery vans and pickup trucks did not book any sales. Instead, it posted a net loss of $111 million, compared to $90.7 million in the same quarter last year.
Financially, Canoo’s news wasn’t all bad, though: R&D expenses fell 44% year over year, and its Q1 adjusted EBITDA loss improved to $48.3 million from nearly $57 million last quarter. The decision to purchase Arrival’s auctioned assets also reduced the company’s capital expenditures by “tens of millions of dollars,” according to CAO Ramesh Murthy. In a filing with the U.S. Securities & Exchange Commission, company officials said they expect to save $50 million in capex in 2024 versus their previous projections.
Despite the disappointing top-line numbers, CEO Tony Aquila praised his team for not focusing on consumer markets. He said the strategy has “played out favorably based on the temporary headwinds” in the industry. Consumer-focused EV makers such as Rivian Automotive Inc. and Lucid Group Inc. have experienced slowing demand and low production outlooks this year. At the same time, the auto industry’s largest OEMs have pulled back on ambitious EV segment plans. Rivian has also pivoted to focus more on the commercial vehicle market, penning an electric van development partnership with truck body manufacturer JB Poindexter & Co earlier this year.
“It's been hard work to get here, and there have been bumps in the road, and we will continue to fine-tune,” Aquila said. “But as the smoke clears and the true value of the companies that made tough decisions early to focus on core markets with differentiated products, we believe will see not only appreciation but will deliver a new standard of how global platforms can better meet customer use cases.”
See also: Canoo acquires new EV production facility in Oklahoma City
Canoo broadly markets itself to commercial, government, and military entities. It completed a pilot program with Walmart Inc. (No. 7 on the FleetOwner 500: Private) and has partnerships with the U.S. Postal Service and the National Aeronautics and Space Administration. The company also recently signed a sales deal with paint manufacturer Jazeera Paints to initially sell 20 EVs with the option to expand the fleet to 180 vehicles.
The company's revenue outlook remains unchanged, with executives estimating it at $50 million to $100 million. In 2023, Canoo generated a total of $886,000 in revenue.
Share prices of Canoo (Ticker: GOEV) have been trending downward over the past six months, hitting a low of $1.22 per share in March. Canoo reported earnings after the bell May 14, when its stock closed at $2.79. On the afternoon of May 15, its share price was at $2.58 per share, putting its market capitalization at $166.6 million.
