Canoo gets LDV delivery boost
The US EV maker feels its gradualist approach to growing production capacity and sales in parallel is starting to pay off
US commercial EV maker Canoo has delivered 130 electric light-duty vans (LDVs) to Kingbee, a Utah-headquartered van fleet solutions provider.
"We are proud that an increasing number of our vehicles are on the roads of America, and we are looking forward to our vehicles joining Kingbee and its impressive list of customers,” says Tony Aquila, Canoo CEO.
Shares in the company have been on a continuous slide for the past year down to below $0.20/share. But now a renewed push towards ramping production that has been in the works since November has begun to return revenue.
As part of the agreement, Kingbee will purchase 9,300 Canoo vehicles, with an option to increase to 18,600 vehicles, subject to availability. Kingbee will upfit, custom wrap, and deliver Canoo vehicles as work-ready fleet solutions for companies across the US, the EV maker says.
"Canoo delivered vehicles to Kingbee consistent with its schedule as part of a phased ramp-up manufacturing approach in Oklahoma City. Additional customer deliveries will be scheduled through 2024," Canoo adds.
This OK manufacturing ramp-up has been ongoing since November, when the firm announced the first delivery of its EVs to the state government, followed up just days later with a deal to sell 550 of its Lifestyle Vehicle EVs to Los Angeles airport transportation shuttle firm Prime Time Shuttles.
This expansion has been aided by a cash injection in early October when the firm entered into a $45mn convertible preferred stock purchase agreement with a "foreign strategic institutional investor".
Since then, Canoo has further boosted its OK production capabilities with an early January purchase of manufacturing assets "at dramatically reduced prices" to help scale production at the facility. Canoo purchased the cache of manufacturing assets — from robotics to controls processing equipment that will be used to build vehicle cabins — at a discounted price of over 80pc of estimated value, it says.
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"While many companies invested in capital equipment prematurely, we continue to phase our investment with our growth," says chief accounting officer Ramesh Murthy. "These opportunities to acquire assets at significantly discounted prices have allowed us to further reduce our 2023 capital expenditures and also to improve our guidance by millions of dollars.”
The company also revealed last week that renewed ramp-up would support customer deliveries of 18,000 committed orders representing $750mn in revenue.