Canoo Electric Vehicles selects Oklahoma for plant

[ComeOnBenjals!]

Watch the state not even land the Panasonic plant.

At least Tulsa can hang their hats on the sweet tea factory.

No need for disparaging comments.

Canoo was always a risk, hoping they can pull through but I have doubts. I think Panasonic is still a strong possibility.. one would think they would have already announced Kansas as the winner if that was the case. Didn't help that our state government waited till the last minute to pass incentives.

[Jersey Boss]

Canoo CEO warns company could go out business before a single car is made in Pryor

[Anonymous.]

So basically it's almost time to buy when it is under a dollar.

[BG918]

It was a risk in an emerging space that needs cheap credit and has too many companies chasing too few profits. Was probably worth it, but the markets have changed significantly so far in 2022.

Cheap credit dried up and many EV companies are going to be toast

This is happening everywhere. Ford sold a huge stake in Rivian. Tesla stock is way down. Lordstown is running out of cash.

Tesla also was in danger of running out of cash in 2019. I see Canoo either getting a last-minute infusion from Wal-Mart or GKFF, or both, or going bankrupt and restructuring with an infusion from Wal-Mart/GKFF

https://www.theverge.com/2019/5/17/1...loyee-expenses

[Jersey Boss]

Tesla had product for sale at that point, not just protypes. Huge difference. Tesla was more than an idea.
Also Canoo has that open SEC investigation, probably a chilling prospect to throw more money at.

[Plutonic Panda]

I hope they can overcome this: https://tulsaworld.com/news/local/pr...6ed612deb.html

Remain positive. It’s a cool concept and I’ve been considering one myself though I’m leaning more towards the Hummer EV when I can afford it. They really look cool and I hope they can pull through this.

https://kfor.com/news/local/canoos-f...oma-lawmakers/

[Pete]

The reason I posted that Car & Driver article is because they are completely respected in the auto industry and have done a fantastic job of unbiasedly covering the scores of new electric vehicle companies and the EV models by established brands. They have followed Canoo and everyone else from inception.

They have been my go-to source for reputable auto news for literally five decades. And there is no way their editors and writers are going to risk their reputation (and possible lawsuits) by writing something as emphatic as "we would be surprised if even one consumer-ready Canoo ever rolls off the production line" without being about as sure as they can be.

Rather than trying to be optimistic, I'm like the family member who was just told by the lead doctor there is no hope.

[Plutonic Panda]

^^^ that was a Yahoo! article?

[soonerguru]

Here is a Reuters account.

Seems hard to see any light here. Even with state incentives, $15 million isn't that much dough when you have the kind of burn rate Canoo probably does. Never a good sign when the company itself raises the specter of failure.

https://www.yahoo.com/finance/news/e...235059036.html

[Mississippi Blues]

^^^ that was a Yahoo! article?

His post right before the Yahoo link has the Car & Driver article. Post #122 to be precise.

[Plutonic Panda]

His post right before the Yahoo link has the Car & Driver article. Post #122 to be precise.

Thank you I missed that. Pete is spot on about Car and Driver.

[David]

The Waltons also invested $150 million in Theranos.


Canoo electric-vehicle startup had aimed to begin production this year but now says in an earnings report that there is 'substantial doubt' about its future.

Based on the last few posts I had to go read it, and wow.

[Pete]

Seems hard to see any light here. Even with state incentives, $15 million isn't that much dough when you have the kind of burn rate Canoo probably does. Never a good sign when the company itself raises the specter of failure.

Canoo said they burned through $120 million in the first quarter.

In terms of the wording, it's called a "going concern warning" and it's legally required. It's basically a huge red flag for future investors and banks which obviously makes it much more difficult to raise funds.

It's to stop companies like Theranos from painting a rosy picture while soliciting more funding, when in fact they are in dire financial straights.

A going concern warning is issued by a company's management or auditors — or both — when they believe that within the upcoming 12 months from the date of the report "it is probable" the company will not have the liquidity to pay its obligations as they come due, or will violate a debt covenant.

[shawnw]

it's hard to mentally conceptualize what one could even spend $120M on without having anything to show for it.

[Plutonic Panda]

I was about to make that comment. It shows how little I know about economics. I was just reading an article yesterday about how Uber still isn’t profitable and spent/burned through/lost 20+ billion dollars since 2017. It’s mind boggling to me.

[shartel_ave]

https://techcrunch.com/2022/05/10/ca...evs-to-market/

[gopokes88]

I was about to make that comment. It shows how little I know about economics. I was just reading an article yesterday about how Uber still isn’t profitable and spent/burned through/lost 20+ billion dollars since 2017. It’s mind boggling to me.

Which they could do because the Fed had the easy money high liquidity punch bowl out.

The party is over. The Fed put the punch away.

Canoo is toast and will be one of many.

[shavethewhales]

Canoo said they burned through $120 million in the first quarter.

In terms of the wording, it's called a "going concern warning" and it's legally required. It's basically a huge red flag for future investors and banks which obviously makes it much more difficult to raise funds.

It's to stop companies like Theranos from painting a rosy picture while soliciting more funding, when in fact they are in dire financial straights.

Exactly, going concerns are common statements in the financial disclosures of companies that rely on debt or equity issuance to survive until they can make a profit.

The big picture here is still concerning. Canoo is spending a ton of money without much to show for it yet. They are hemorrhaging senior staff and changing plans all the time. Now it seems they are focused on some sort of Arkansas plant to get production started this year. Supposedly they have a cash runway of $600 million to get them to production, but then how much revenue are they really going to make by end of year? A few thousand units isn't a huge amount of revenue considering the costs involved, and it seems doubtful they'll really produce at least 3 thousand units this year like they hoped.

And where did that $120 million go? I haven't read through their financial statements yet, but hopefully most of that was one-time equipment expenditures for their plants.

More info here on their funding availability and production plans:
https://www.caranddriver.com/news/a3...ncial-trouble/

[Bellaboo]

it's hard to mentally conceptualize what one could even spend $120M on without having anything to show for it.

Probably some bonus pay passed around.

[PhiAlpha]

The reason I posted that Car & Driver article is because they are completely respected in the auto industry and have done a fantastic job of unbiasedly covering the scores of new electric vehicle companies and the EV models by established brands. They have followed Canoo and everyone else from inception.

They have been my go-to source for reputable auto news for literally five decades. And there is no way their editors and writers are going to risk their reputation (and possible lawsuits) by writing something as emphatic as "we would be surprised if even one consumer-ready Canoo ever rolls off the production line" without being about as sure as they can be.

Rather than trying to be optimistic, I'm like the family member who was just told by the lead doctor there is no hope.

Have to give you credit. You called it from the beginning. Hopefully it still works out but definitely disappointing.

[Pete]

Have to give you credit. You called it from the beginning. Hopefully it still works out but definitely disappointing.

I just follow this stuff very closely and have always deeply loved cars and the auto industry.

Car and Driver does a fantastic job of covering the business side of all these upstarts and they have a bunch of really smart and well-informed writers. Motor Trend and CNET Roadshow as well, just to a lesser extent.

(A bit of disclosure: My dad was a regional sales manager for a big periodical distribution company, so we received advance copies of almost all magazines. I got hooked on car mags around age 10.)


Of course I hope things work out for Canoo; despite the Oklahoma connection you just want to see people who take big risks rewarded. But you also have to educate yourself on the realities.

[gopokes88]

Exactly, going concerns are common statements in the financial disclosures of companies that rely on debt or equity issuance to survive until they can make a profit.

The big picture here is still concerning. Canoo is spending a ton of money without much to show for it yet. They are hemorrhaging senior staff and changing plans all the time. Now it seems they are focused on some sort of Arkansas plant to get production started this year. Supposedly they have a cash runway of $600 million to get them to production, but then how much revenue are they really going to make by end of year? A few thousand units isn't a huge amount of revenue considering the costs involved, and it seems doubtful they'll really produce at least 3 thousand units this year like they hoped.

And where did that $120 million go? I haven't read through their financial statements yet, but hopefully most of that was one-time equipment expenditures for their plants.

More info here on their funding availability and production plans:
https://www.caranddriver.com/news/a3...ncial-trouble/

You have any idea how hard it is to engineer a car from scratch?

[BG918]

Apple rumored to be interested in acquiring Canoo

https://www.notebookcheck.net/Apple-....619827.0.html

[David]

Makes sense, both names have five letters. It's a clear match.

[jedicurt]

Apple rumored to be interested in acquiring Canoo

https://www.notebookcheck.net/Apple-....619827.0.html

probably means they just move the engineers to their other facilities and still means nothing gets built in Oklahoma. hope i'm wrong, but that is how i imagine it working out

EDIT: lol read the article after i posted. and it pretty much says the same thing i did, that Apple probably wants to do it to just get more tech and engineers for it's existing work