Canoo faces funding crunch as it buys Arrival manufacturing kit
Electric light truck startup Canoo has started shipping its commercial vehicles but faces a funding crunch as it buys equipment from a failed UK startup.
Canoo shipped 22 vehicles in 2023, 17 of them in the last quarter, and has deals with the United States Post Office (USPO), space Agency NASA and Walmart. The company saw losses fall from $508m in 2022 to $302m in 2023 and expects to spend up to $300m this year with revenues below expectations at up to $100m.
It went went public via a merger with a special purpose acquisition company in 2020 which raised $300m. It is tackling the shortfall by buying up manufacturing equipment from other failed startups, notably UK startup Arrival Automotive UK which went into receivership in February 2024.
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The purchased assets will be collected into more than 20 containers and shipped by sea to Canoo’s manufacturing facilities in Oklahoma alongside the new and like-new assets owned by Arrival Automotive USA. These assets were transported from Arrival’s North Carolina facility and received at Canoo’s Oklahoma facility where commissioning is underway.
Canoo says it has the necessary manufacturing equipment to deliver 2024 production and this acquisition expands its capabilities to deliver its 2025 production at significantly lower costs.
It also has $45m backing from a ‘Foreign Strategic Institutional Investor’ and a deal to sell 20 vehicles to Jazeera Paints in the Middle East this year with an option for 180 more.
The company is based around a skateboard platform that combines the motors and battery pack and allows a range of different shells to be placed on top for different applications. IT unveiled a version called the American Bulldog that builds upon rapid product development and real-world testing
“In Q4 2023, we started our first commercial fleet customer deliveries from our Oklahoma City manufacturing facility while we continue to prepare the site for our 20,000 unit run-rate production target,” said Tony Aquila, Investor, Executive Chairman and CEO of Canoo.
“Our strategy to purchase manufacturing assets at deep discounts creates immediate shareholder value. We recently announced our OKC facility has received FTZ designation. With positive customer validation, we are now focused on harmonizing our supply chain to align with our step level manufacturing goals while maintaining disciplined capital allocation.”
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