Canoo

[PhiAlpha]

The biggest challenge for EV-only manufacturers is that their main source of revenue, selling their carbon offset credits, isn't needed anymore.

From a financial perspective that’s an issue for sure but I think lack of current market and infrastructure is a bigger one. If you’re selling tons of your cars at a profit, the carbon credits don’t matter as much anymore. Everyone is trying to force this stuff over the chasm with the flip of a switch and it just isn’t there yet. I have some major concerns about raw material availability for batteries as well and if feels like everyone pushing EVs is either oblivious to that or acting conveniently unaware. China and a bunch of countries that we aren’t getting along with all that well currently have a ton of the supply and while we do have some resources of our own here…the federal government has been making moves to restrict mining in some key areas. If China cuts us off at some point due to geopolitical conflict, it’s going to be a massive problem. I think people have a lack of understanding of the battery raw material sourcing/mining process and it has a strong possibility of ending up volatile similar to oil and gas if we don’t start sourcing/mining more of it here or in countries not controlled by China and other non-allies.

[Just the facts]

Tesla is struggling right now with the loss of their carbon-selling business. Raise prices to increase revenue and sales drop off significantly, lower prices to gain market share and Wall Street flips out.

[PhiAlpha]

Tesla is struggling right now with the loss of their carbon-selling business. Raise prices to increase revenue and sales drop off significantly, lower prices to gain market share and Wall Street flips out.

I guess my point is…manufacturers don’t need credits currently to be profitable selling gasoline and hybrid vehicles. If the market growing/maturing as fast as people want us to believe it is and infrastructure was in place to handle the growth…they wouldn’t need the credits to be profitable.

[Just the facts]

I guess my point is…manufacturers don’t need credits currently to be profitable selling gasoline and hybrid vehicles. If the market growing/maturing as fast as people want us to believe it is and infrastructure was in place to handle the growth…they wouldn’t need the credits to be profitable.

I agree. Ford uses their EV division carbon-credits to off-set the penality for only making SUVs, and uses the high profit margins on the SUVs to subsidize the EV division. EV-only can't do that. Ford can't do it forever either.

Back to Canoo, they said they will produce 20,000 cars by the end of the year, and it is mid-May now and they don't have any place to make their first car yet.

[Pete]

Canoo is set to report their 2nd quarter financials on 8/14.

Last quarter:

The Texas-based company warned investors in May that it might not be able to meet its financial obligations, saying it had access to $600 million in funding but added it had "substantial doubt" about continuing as a going concern.

[jackirons]

I just looked at the YTD performances of some EV stocks (not completely apples to apples). Canoo is down 83% over the past full year
-Tesla > +106.09%
-Rivian > +37.06%
-Lucid > -3.07%
-Canoo > -50.98%

[Pete]

Their building permit for the plant in far west OKC was finalized and issued.

I'll have to get out there and see if there has been any movement. I suspect they'll address that facility in their 8/14 filing.


They do have a bunch of jobs posted in OKC:

https://www.indeed.com/q-canoo-l-okl...d5c11d47222907

[PoliSciGuy]

I just looked at the YTD performances of some EV stocks (not completely apples to apples). Canoo is down 83% over the past full year
-Tesla > +106.09%
-Rivian > +37.06%
-Lucid > -3.07%
-Canoo > -50.98%

Oof, that’s not great. If they can actually build these things though they’ll have a strong market waiting for them, especially with the tax break on domestically made EVs

[UrbanistPoke]

I just looked at the YTD performances of some EV stocks (not completely apples to apples). Canoo is down 83% over the past full year
-Tesla > +106.09%
-Rivian > +37.06%
-Lucid > -3.07%
-Canoo > -50.98%

Really means nothing when your stock is less than $5 and has been for a very long time. There's a reason people like what's called "Penny Stocks" because they have large fluctuations and you can make a lot of money really fast or lose a ton fast. It doesn't take a lot of money to be pulled out of Canoo for the stock price to drop that much percentage wise and also wouldn't take much of an investment to get it up that much either. Especially when the market cap is only $350 million too.

Lucid has a $15+ billion market cap and closest to size to Canoo out of those, so like saying not apples to apples is not even close it's like comparing an apple to the moon and cutting an apple in half and trying to make a comparison to it. Nikola (little over $1 billion market cap) or others are still not apples to apples but could at least draw somewhat of a closer comparison to make it worth looking at. Nikola is down 67.91% over the past 12 months.

[jackirons]

Really means nothing when your stock is less than $5 and has been for a very long time. There's a reason people like what's called "Penny Stocks" because they have large fluctuations and you can make a lot of money really fast or lose a ton fast. It doesn't take a lot of money to be pulled out of Canoo for the stock price to drop that much percentage wise and also wouldn't take much of an investment to get it up that much either. Especially when the market cap is only $350 million too.

Lucid has a $15+ billion market cap and closest to size to Canoo out of those, so like saying not apples to apples is not even close it's like comparing an apple to the moon and cutting an apple in half and trying to make a comparison to it. Nikola (little over $1 billion market cap) or others are still not apples to apples but could at least draw somewhat of a closer comparison to make it worth looking at. Nikola is down 67.91% over the past 12 months.

Nikola is not a great comparison either. Their founder was convicted of fraud.

And yes, those aren't similar companies in terms of market cap. I was simply comparing EV stocks. To say it's struggling is an understatement. It was trading at over $20 at one point. I hope they turn it around.

[UrbanistPoke]

Nikola is not a great comparison either. Their founder was convicted of fraud.

And yes, those aren't similar companies in terms of market cap. I was simply comparing EV stocks. To say it's struggling is an understatement. It was trading at over $20 at one point. I hope they turn it around.

The fraud issue with the past CEO is not relevant to Nikola today, it is still trying to be a legit company and could eventually be one still - similar to Canoo (Canoo has had it's share of sketchy financial issues too as most start-ups do lets be honest). Just saying market cap is far better to compare when it's a small company. $3.5 million pulling out of Canoo stock isn't a lot of money but would be 1.0% of all stock. If someone pulled 1.0% out of Lucid they'd be pulling out a $150 million investment. That would be pretty shocking for Lucid because that's institutional investment type dollars, for Canoo no - a small hedge fund or really rich individual could come up with that if they wanted a really risky investment they thought could pay off and they don't care if they lost it. So it's just not even in the same solar system let alone not close to "not quiet apples to apples" is all I'm saying.

If there were other small cap EV or Alt Energy Car Companies with stocks going up 100%+ and Canoo was the only one down 50% or so - sure could be a relevant metric to discuss and look at what the issues could be or whether there was something immediately dire to Canoo going on.

[Rover]

Really means nothing when your stock is less than $5 and has been for a very long time. There's a reason people like what's called "Penny Stocks" because they have large fluctuations and you can make a lot of money really fast or lose a ton fast. It doesn't take a lot of money to be pulled out of Canoo for the stock price to drop that much percentage wise and also wouldn't take much of an investment to get it up that much either. Especially when the market cap is only $350 million too.

Lucid has a $15+ billion market cap and closest to size to Canoo out of those, so like saying not apples to apples is not even close it's like comparing an apple to the moon and cutting an apple in half and trying to make a comparison to it. Nikola (little over $1 billion market cap) or others are still not apples to apples but could at least draw somewhat of a closer comparison to make it worth looking at. Nikola is down 67.91% over the past 12 months.

What you say is true, but it is also true there apparently isn’t much appetite for buying from risk investors. They aren’t confident enough of its ability to survive to take a risk. If there was confidence in leadership, etc., even a modest amount of buying would boost prices. As you rightly point out, it doesn’t take much. So, there apparently isn’t much demand. Even in penny stocks you don’t just ignore risk. No one in their right mind just blindly invests.

[UrbanistPoke]

What you say is true, but it is also true there apparently isn’t much appetite for buying from risk investors. They aren’t confident enough of its ability to survive to take a risk. If there was confidence in leadership, etc., even a modest amount of buying would boost prices. As you rightly point out, it doesn’t take much. So, there apparently isn’t much demand. Even in penny stocks you don’t just ignore risk. No one in their right mind just blindly invests.

I personally probably wouldn't throw even $5 at Canoo stock. I don't like investing in that area, only one I've ever had luck with was Transocean and made a good amount of money off of that, buying it on the verge of bankruptcy and it's not over $7/8. A lot of the small cap EV/Alt Energy car companies are being hammered because of interest rates. Even the large ones like Lucid, Rivian, etc. rely on financing and inflows of capital to scale up and it is even difficult for them to make a likely route to profitability. Tesla only was able to do it because capital was so cheap for so long and they benefited from government tax credits. That's why you're seeing significant stock selloff from the smaller cap companies like Canoo - let alone all the management/other issues internally with Canoo. Any type of start up that is bleeding tons of cash and relied on cheap money 2 years ago for that past decade has had a very rude awakening in the past 48 months as rates went up and cost of capital is easily 3x what it was. There's a reason you don't see many new car companies ever, it's incredibly capital intensive and takes a long-term to ever get to a profitable scale/size and then if you make it there you're fighting against legacy companies that have immense branding power in the minds of consumers.

Canoo I bet will go bankrupt, question is will it get liquidated and stop existing or will someone like Walmart, etc. pull it out of bankruptcy and keep trying.

[catch22]

I think they are positioning themselves for a takeover, so profitability is not a huge concern. Keep building the business infrastructure and hope someone bigger buys them out as a "turnkey" expansion.

[Jersey Boss]

Canoo is set to report their 2nd quarter financials on 8/14.

Last quarter:

Canoo fined 1.5m by SEC on their claimed revenue projections.

https://www.msn.com/en-xl/money/tops...ng/ar-AA1eOtpt

[Paule4ou]

The financial call Monday afternoon should tell us a lot. The Whisper #’s are interesting to say the least.

[Bellaboo]

I drove by the I-40 Morgan Rd facility the other day and the parking lot had a lot of vehicles in it.

[Pete]

The Terex signs are still up and I can't see any signs of construction.

[Paule4ou]

https://investors.canoo.com/news-pre...r-2023-results

[Pete]

https://investors.canoo.com/news-pre...r-2023-results

"Our facilities are nearing substantial completion as we've achieved a 20,000 unit run rate for our battery module line in Pryor and robotics and assembly line in Oklahoma City for our MPP1 platform."

[shavethewhales]

Weird that they haven't taken the old sign down at least, but it does look like there's activity at the building?

The report shows that they are running out of cash, and as a beaten-down penny stock in a rising interest environment it's going to be hard for them to fundraise continuously. There are many famous examples of big companies burning cash for years, but that happened under specific circumstances that Canoo will probably not enjoy at this point. They better start selling a serious number of cars quickly.

[Swake]

Weird that they haven't taken the old sign down at least, but it does look like there's activity at the building?

The report shows that they are running out of cash, and as a beaten-down penny stock in a rising interest environment it's going to be hard for them to fundraise continuously. There are many famous examples of big companies burning cash for years, but that happened under specific circumstances that Canoo will probably not enjoy at this point. They better start selling a serious number of cars quickly.

With Wal-Mart as a partner and customer, it's not the selling that's the issue, it's the building they need to worry about. But it's looking more positive based on what Pete posted. The modular platform is a great idea if they can pull it off.

[Jeremy Martin]

I keep tossing some throw away money at the stock. I figure I have a better chance of the stock price going up than winning the lottery so that's where my lotto money is going.

[Pete]

The photo below shows the assembly line in OKC being readied for production. They have a lot of the robotic equipment on site and as I posted upthread, they have a bunch of job postings for this plant.

******


Canoo’s EV projects get incentive-laden financial boost
By: Jeff Elkins//The Journal Record//August 14, 2023

OKLAHOMA CITY – Electric vehicle startup Canoo’s contracts securing workforce and economic development incentives with the state and Cherokee Nation are finalized.

The company on Monday announced it has signed agreements on incentives for its vehicle assembly facility in Oklahoma City and a battery module manufacturing plant in Pryor with a combined value of up to $113 million for 10 years.

The agreements require the company to meet job creation and investment targets. Oklahoma Department of Commerce Communications Director Becky Samples said the inventive packages are performance-based, meaning the company doesn’t receive any money from the state until “certain agreed-upon thresholds are met.”

According to the contract, provisions include Canoo’s employment of at least 100 new direct jobs with an average annual wage of at least $60,512 by Jan. 1, 2024, before it receives $1 million. Canoo will be paid $2 million with cumulative employment of at least 350 new direct jobs.

An additional $4.5 million will be paid when Canoo reaches 850 jobs; however, that is contingent on appropriation of the funds by the end of the 2024 legislative session. If additional funds are not appropriated by the end of the session, then the provision for payment will not be enforceable, and payment from the fund will be invalid and cannot occur.

If Canoo were unable to maintain at least 80% of the applicable job level for 18 months after receiving payment, or if the level were to fall below that threshold within 18 months, the company would be obligated to pay all incentives received back to the state and ODOC.

According to the Oklahoma Quality Jobs Program Act contract, a three-year period during which Canoo must generate a minimum annual new payroll of $2.5 million in gross taxable wages will commence at the start of the calendar quarter for which the first incentive claim must be filed with Oklahoma Tax Commission.

The maximum payable benefit under the terms of the OQJPA contract during the 10-year period is $40 million.

Canoo will be required to repay all incentive payments received under the OQJPA if it’s determined by the Oklahoma Tax Commission to no longer have business operations in the state within three years from the beginning of the calendar quarter that the first incentive payment claim is filed.

Canoo Vice President Chris Moore said locating the facility and plant in Oklahoma is a “valuable opportunity” for the company and a chance to be a part of the state’s growth history.

Canoo entered a lease agreement for the close to 500,000-square-foot assembly facility in April.

Moore declined to give a timeline on when production of vehicles will start. He said they’re currently installing equipment and “turning everything on.”

“We’ve made some of the improvements that need to be done at both sites,” Moore said. “We’re focused right now on manufacturing readiness and getting those facilities up and running and ready to operate and getting our workers in and trained and ready.”

Moore said an update on the start of production will come in “the near future.”

According to a Monday release, Canoo looks to play a role in contributing to the broader strategy shared by state leaders, the Cherokee Nation and MidAmerican Industrial Park to grow the local automotive sector and to attract new clean energy technology investment.

Canoo signed on-the-job training agreements with the Cherokee Nation. Under these agreements, the Cherokee Nation will work with Canoo to identify workers within the tribe’s reservation to staff the battery module manufacturing facility in Pryor.

Brandon Scott, vice president of enterprise communications for Cherokee Nation Businesses, said the on-the-job contract between the Cherokee Nation and a business provides that the tribe reimburse the business up to 50% of a participant’s wages during the training period, for up to six months.

Canoo CEO Tony Aquila said the finalization of the agreements is the result of a multi-year effort that enables the company to hire more than 1,300 Oklahomans and bring new industry to the state.

“We’re grateful for the warm reception we’ve received, and we look forward to further building upon our relationships with state and local government and tribal leaders to realize their vision for Oklahoma,” Aquila said in a statement Monday.

[David]

I keep tossing some throw away money at the stock. I figure I have a better chance of the stock price going up than winning the lottery so that's where my lotto money is going.

I decided to do so as well today after the latest news. I've mostly been pessimistic about this company up to this point but maybe signs are pointing up, and having a financial stake in an EV company with a significant Oklahoma presence appeals to me.