Canoo, an electric vehicle maker with operations in Bentonville and plans to place its headquarters there, said Wednesday it will make its own battery modules at an Oklahoma facility close to its future manufacturing center.
The 100,000-square-foot facility will be used to build proprietary battery modules as well as energy management system and thermal control technology for the the company's multi-purpose vehicle platform. Once fully online, the facility will be able to produce 3,200 megawatt hours of battery module capacity a year. Battery modules are individual battery cells assembled together.
"This is the first building block for Canoo's production ramp strategy, with more news coming very soon," Tony Aquila, an investor, chairman and chief executive officer at Canoo, said in a statement. "The location has been strategically selected due to its proximity to our battery cell partner Panasonic and our future MegaMicro factory."
In response to emailed questions, the company declined to provide further details on the battery facility.
In a conference call in August concerning Canoo's second-quarter earnings, Aquila said the company has contracted with a third party for limited production of its vehicles while Canoo's facilities come online. Canoo reported a loss of $164.4 million for the second quarter ended June 30 compared to a loss of $112.5 million for the same period a year ago but said it had more than $1 billion in its sales pipeline. At the time, the company said it had access to about $250 million in capital. Canoo is expected to release third quarter earnings after market close on Nov. 9.
The new Oklahoma facility will produce proprietary battery modules on high capacity assembly lines with automated machinery. Workforce training programs will be put in place with a goal to provide high paying light blue collar jobs to the community, the company said in its release. Canoo earlier said Panasonic would make the company's battery cells which will be used to make the modules.
Canoo shares fell Wednesday, mirroring the broader market decline that started when Federal Reserve Chairman Jerome Powell indicated interest rates may need to go higher to keep inflation in check. Canoo shares closed at $1.32, down 5 cents or nearly 4% in trading on the Nasdaq. The shares have traded as low as $1.28 and as high as $13.35 over the past year.
Tomas Jandik, professor of finance and the Dillard's Chair in Corporate Finance at the University of Arkansas' Walton College of Business in Fayetteville said the news on the battery operation wasn't particularly significant as far as the market was concerned.
"It's not an event that will move the market," he said during an interview by phone Wednesday.
Instead, Jandik said, investors will be watching closely for the company's third quarter earnings report for indications Canoo has secured solid funding for its operations and future plans. Jandik noted in May the company had warned in a filing with the Security and Exchange Commission it may not be able to continue as a going concern unless it obtains enough funding. A going concern refers to a company's ability to make enough money to stay in business or to avoid bankruptcy.
"Everyone who wants these shares owns them now," Jandik said of Canoo stock.
Plans are for the company to begin renovations of the building that will house its battery facility at MidAmerica Industrial Park in Pryor, Okla., in the fourth quarter of this year. Delivery of manufacturing equipment is expected in the first quarter of 2023.
In response to emailed questions, a spokesman with the Oklahoma Department of Commerce said Wednesday Canoo has not yet applied for any incentives regarding the battery facility and declined to offer a statement about the announcement.
The facility will be close to Canoo's MegaMicro Factory, a 400-acre campus at MidAmerica Industrial Park. The MegaMicro Factory will include a full commercialization facility with a paint, body shop and general assembly plant and employ more than 2,000 when fully operational, the company said.
In mid-October, Canoo secured a binding order from Utah-based van provider Kingbee for 9,300 vehicles. The deal has an option to double the order of Canoo's Lifestyle Delivery Vehicles, or LDVs. Earlier in October, Canoo said it had a deal with Los Angeles-based Zeeba for 5,450 vehicles. In August electronic vehicle subscription company Autonomy said it ordered 100 vehicles
In July Walmart said it would buy 4,500 electric delivery vans with an option for up to 10,000. The Walmart deal with Canoo prohibits the startup from doing business with Amazon and gives Walmart an option to buy more than 20% of Canoo's stock. Canoo said recently it has been successfully testing its Lifestyle Delivery Vehicles for Walmart in the Fort Worth/Dallas area.