Canoo aims for global sales expansion

The firm is trying to juggle production capabilities with its order book in light of limited cash

Canoo aims for global sales expansion
Canoo posted a loss of $110mn for Q1

US EV start-up Canoo saw its net loss increase by 22pc year-on-year in Q1 to $110mn. But it is hopeful both of converting a pipeline into new sales and then ramping up production to meet these orders as the year progresses.

"On our manufacturing and supply chain progress, which to some extent has slowed down, we expect more activity as we move through the year," says Canoo CEO Tony Aquila. "We are working very aggressively to close the gap."

The firm is coy about precise delivery numbers, though, with the only mention of sales in Q1 being the delivery of 190 trucks to the US Postal Service (USPS). There is though, according to the Canoo CEO, "tremendous upside" in terms of increasing sales to the USPS.

"We are increasing our step level manufacturing to reach a run rate of 20,000 vehicles by year end, and to harmonise our supply chains and fulfil our growing backlog," Aquila says.

And it is hoping for sales to come from a range of buyers not just in the US, but globally. Having secured two recent orders in Saudi Arabia, for paint manufacturer Jazeera Paints and tourism project Red Sea Global — with the first vehicles under the latter contract arriving in mid-May — the firm is casting its net even wider.

"These agreements come from long-standing relationships in the Kingdom and are now generating strong interest, including initial orders, and are opening the opportunity for additional capital partnerships," Aquila expands

British ambition

"Many of you were wondering why we were so focused on becoming one of the approximate 261 foreign trade zones in the US at our OK facility. We recently completed a two week tour in the UK with our vehicles, including fleet shows and other events, which showcased our right hand drive LDV configuration," he continues.

The firm met with eight of the UK's top fleet operators, together representing over 1mn fleet units on the road — fleets that have current electric adoption rates of up to 20pc, he continues. "The UK market has the tailwind of an aggressive mandate... of electrification goals and continues to be one of the fastest to adopt commercial EVs. We appreciate being given 'The One To Watch' annual award at the Great British Fleet event," Aquila says.

At home, negotiations too continue with new buyers, including supermarket heavyweight Walmart. "While we are not yet authorised to discuss all of the names, we continue to finalize vehicle configurations and set delivery schedules for our Fortune 100 customers to align with their workflows and use cases, and we will update you as we are able," the Canoo chief teases.  

But Canoo is focused on matching as best possible this expanding orderbook to increases in capacity, rather than allowing the latter to outrun the former. "In all my years in this industry, especially around parts, locking your supply chain too early will only cause you problems as we have seen with recent current events that have been unfortunate for some," Aquila cautions.

Freight focus

The firm's focus on public sector large fleet orders could make it relatively immune to more mercurial private buyer demand, a factor which Aquila told analysts is underappreciated about the company.

"In my conversations with investors, it is often misunderstood that we are first focused on commercial, government and military end markets and have intentionally avoided the consumer market."
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"We remain convinced that the commercial and government segments have crossed the tipping point with electrification and are the most attractive markets to pursue for our vehicles," CFO Greg Ethridge adds.

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