Cash-strapped Canoo lowers revenue expectations for 2024

The nationwide slowdown in demand for battery-powered cars prompted Oklahoma City’s EV manufacturer Canoo to forecast revenue in 2024 to be well below the expectations of analysts.

At the same time, only 22 Canoo vehicles were manufactured in 2023, 17 of them in the fourth quarter.

The forecast was released Monday while shares in the EV maker finished Monday’s trading with a more than 8% gain of 30 cents to settle at $3.87. But Canoo’s warning for the eighth straight quarter of declining capital ability also has sent the company’s shares down 38% in extended trading.

“We will continue to make progress towards accessing additional forms of debt and other non-dilutive forms of capital as we move into 2024,” CFO Greg Ethridge said on a post-earnings call reported Reuters. “Let’s be very clear. We’ll only raise the capital that we need.”

Canoo has warned investors two years now that it might have problems in remaining in operationand the warnings have left investors cautious, thus creating problems for the firm to raise more money.

Canoo said it saw a 45% or $184.2 million annual adjusted EBITDA improvement from a loss of $408.6 million in 2022 to a loss of $224.4 million last year. But the EV maker also announced it intends a 40% or $11.9 million reduction in capital expenditures compared to its already reduced 2023 second-half guidance.

Adjusted EBITDA of $(54.6) million and $(224.4) million for the three and twelve months ended December 31, 2023, compared to $(60.5) million and $(408.6) million for the three and twelve months ended December 31, 2022.

Canoo leadership pointed to some positive aspects of its operations including an agreement with USPS for the purchase of its Right-Hand Drive LDV 190s, the startup of its commercial fleet customer deliveries and the recent acquisition of adanced manufacturing assets from another EV firm that recently went bankrupt. The acquisition, according to Canoo, should reduce its anticipated capital expenditures by 34%.

While Canoo managed to manufacture only 22 vehicles last year, it still anticipates its highly-promoted expectation of eventually producing 20,000 vehicles a year.

“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,” stated the firm in its fourth quarter release.

“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,” said Tony Aquila, Investor, Executive Chairman and CEO of Canoo.

Aquila remained optimistic pointing to the company’s delivery of three vehicles to the state of Oklahoma in the fourth quarter. It also created 100-plus jobs in the state as it started manufacturing at a site in west Oklahoma City along Interstate 40. The company also received a $45 million investment from a Foreign Strategic Institutional investor and unveiled the American Builldog which buildsl upon rapid product development.

The company stated it expects annual revenue of $50 million to $100 million in 2024 along with cash outflow of $45 million to $75 million per quarter. Canoo also said it will continue looking to acquire distressed assets in the coming year anticipating possible changes to its capital lexpenditures guidance.