Everything investors should know from EV start-up Canoo’s investor day


Canoo electric vehicle

Source: Canoo

Electric vehicle startup Canoo wanted to reassure investors Thursday that it has a solid and real business plan after abrupt changes at the company, including the departure of its co-founder and CEO Ulrich Kranz, who recently joined Apple.

Speaking at the company’s Investor Day, Tony Aquila, Canoo’s CEO and Chairman, reiterated many of the company’s technological aspirations and plans to build three new electric vehicles, including a pickup truck, and three more electric vehicles. He also provided additional details on his manufacturing plans, including a new U.S. assembly plant.

“We’re in for the long term. I’m in for the long term,” he said during the event, which was held in Dallas and was streamed online.

Since going public through a SPAC deal in December, Canoo’s shares have been roughly halved due to executive departures, changes in business plans, and increased speculation about the viability of many electric vehicles.

It appears that Thursday’s event did little to allay those concerns. The stock fell as much as 5.8% to less than $ 10 per share during the event. They had recovered slightly and closed around 3%.

Canoo CEO and Chairman Tony Aquila speaks during an investor event for the company on June 17, 2021. The event took place in Dallas and was streamed online.

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Aquila said the leadership team is focused on executing its plans to provide long-term value to shareholders, rather than the daily changes in the company’s stock.

“We don’t focus on day trades. We focus on fundamentals,” he told CNBC during an interview on Thursday. “Companies, their stocks don’t always immediately reflect what they have done.”

Bank of America analyst John Murphy described the event as “relatively constructive” but said the company had a “long and busy road” ahead of it.

“We remain a little hesitant because the company has not yet received any firm orders and its business model still seems to be developing,” he wrote in a statement to investors on Thursday and reiterated the company’s underperformance rating.

This is what investors should know from the more than three-hour investor event about Canoo.

US production

Canoo plans to build what it calls a “Mega Microfactory” on 400 acres near Tulsa, Oklahoma, in Pryor. According to the company, vehicle production at the site is scheduled to begin in the fourth quarter of 2023.

Aquila, the company’s third largest investor, called it a “high volume plant” that will take about 18 months to build. He declined to disclose the expected cost and size of the facility, which Canoo says will employ more than 2,000 people.

The company received an incentive package, including the land, to build the Oklahoma plant, valued at more than $ 300 million, Aquila said. He referred to the planned facility several times as a “partnership” with the state. Oklahoma Governor Kevin Stitt shared the stage with Aquila during the event.

Manufacturing partner

Canoo confirmed that its production partner, VDL Nedcar, is based in the Netherlands and is expected to start building its lifestyle vehicle in Europe by the end of next year. The company is expected to help with its U.S. facility as well, Canoo said.

The EV start-up Canoo presented its electric pickup on March 11, 2021.

canoe

Canoo said Nedcar’s European plant is expected to build up to 1,000 vehicles for both the U.S. and European markets in 2022, with a target of 15,000 units in 2023, the company said. Canoo expects to launch its lifestyle vehicle in the fourth quarter of 2022, followed by a “multi-purpose delivery vehicle” and a pickup truck.

The company initially planned to produce vehicles through an outside contractor instead of producing the vehicles itself. It was a big change, along with a significant reduction in plans to offer a subscription-car model and sell its technologies to other companies like Hyundai.

No binding orders

Following the recent pre-order controversy for Lordstown Motors, another SPAC-backed EV start-up, Canoo made it clear that it has more than 9,000 refundable deposits from customers but no firm orders.

Canoo’s van – also known as a multi-purpose delivery van or MPDV because of its equipment options – is designed for commercial customers.

canoe

The disclosure of orders is part of the company’s promise to be disciplined, transparent and stable in its spending and communications with investors, executives said.

“Canoo offers you enormous transparency,” said CMO Mark Aikman, former marketing manager at Mercedes-Benz USA, during the event.

The Securities and Exchange Commission has opened an investigation into Lordstown’s pre-order claims, including the company’s merger with SPAC DiamondPeak Holdings in October.

In May, Aquila confirmed that the SEC had also opened an investigation into Canoo. He characterized it as a “fact finding investigation”. Declining to provide further details, he said the company would provide “timely updates as needed”.

“Big news or no news”

In an attempt to differentiate the company from other hyped EV start-ups, Aquila promised that Canoo would announce “big news or no news, real news or no news.”

“We are long-term shareholders. We are very focused on building strength and building market share with innovative products and platforms,” ​​he said.

Aquila promised that Canoo’s current management team will “be there for the long term” following the departure of Kranz and other executives such as Stefan Krause, another co-founder, and the company’s chief attorney, Andrew Wolstan.

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