Canoo, the electric-vehicle maker with operations in Bentonville and plans to place its headquarters there, reported a third-quarter loss Wednesday and said it has acquired a vehicle manufacturing facility in Oklahoma City.
The facility will produce Canoo's Lifestyle Delivery Vehicle and Lifestyle Vehicle for delivery to customers in 2023 and employ 500, the company said. The location will be capable of producing 20,000 units annually by the end of 2023 with the capability to expand on a 120-acre campus. That production rate could double to 40,000 units in 2024, the company said.
This facility acts as a bridge to the MegaMicro Factory in Pryor, Okla., Tony Aquila, an investor, chairman and chief executive officer at Canoo, said during a conference call Wednesday. He said that the Oklahoma City location could eventually shift to specialized production to avoid overlap with the MegaMicro factory once it comes online.
The company said start of production will be Nov. 17. Aquila said during the company's second-quarter earnings call that Canoo would contract with a third party to build its vehicles until Canoo's own production facilities come online.
Aquila said that between the Cherokee Nation and the states of Arkansas and Oklahoma, the company had received more than $400 million in incentives, and that plans call for Canoo to generate 3,400 jobs.
Shares of Canoo closed Wednesday at $1.17, down 13 cents or about 10% in trading on the Nasdaq. The company released its third-quarter results after market close. The shares rose about 3% by 5:30 p.m. in after-hours trading. Shares have traded between $1.16 and $13.35 over the past year.
Canoo reported a loss of $117.7 million, or 43 cents per share, for the quarter ended Sept. 30, compared to a loss of $80 million, or 35 cents, for the same quarter a year ago. A consensus estimate by three analysts predicted the company would post a loss of 48 cents per share, according to Yahoo Finance.
Aquila said the company has secured an additional $300 million in financing. Canoo projects operating expenses for the fourth quarter of $70 million to $90 million with capital expenditures of $30 million to $50 million.
"The last two quarters have been very tight," Aquila said.
Aquila said the company has $2 billion in its order pipeline and that production is sold out through 2024.
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 Canoo's report was a mixed bag. He said the announcement of the start of production was good news and the addition of the Oklahoma City site was a positive, along with the billions of dollars in orders in the pipeline.
The primary concern, Jandik said, was solid and reliable funding for Canoo. He noted the company is burning through its cash and hasn't locked down a reliable financial partner that can fund the company through its costly growth cycle. He said the question about Canoo's funding is keeping the share price low by dampening investor enthusiasm.
"The question is, will they find a financial lifeline?" Jandik asked.
During the conference call Aquila said Canoo prides itself on a lean operation and is evaluating its financial options as it moves into the production stage.
"We've got a lot to do. We're gonna focus on doing it and doing it to the best of our ability," he said.
Earlier this month, Canoo said 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 company's multi-purpose vehicle platform.
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.
Walmart said in July that 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 LDVs for Walmart in the Fort Worth/Dallas area.