Friday, February 3, 2023
News EV Start up Canoo is Having Financial Difficulties

EV Start up Canoo is Having Financial Difficulties

Canoo might go bankrupt quite soon after having lost $125.4 million in the first three months of the year.

  • Canoo is a small company from Arkansas that showed three EV concepts since 2019

  • The company apparently lost $125.4 million in the first quarter of the year

  • In a report, the company said that there is “substantial doubt” about its future

Many EV start up companies have been having luck lately, like Rivian and Lucid, but others have not had the success they hoped for, like Canoo.

Canoo is a small company formed in Arkansas back in 2017 by a former BMW executive who was previously at the helm of Faraday Future, another ailing EV startup.

The start up showed three concepts it wanted to bring to production: a pod-like minivan called the Lifestyle Vehicle, a similar delivery van called the MPDV and a yet-to-be named pickup truck that was unveiled only last year.

The company had planned to begin production of the Lifestyle Vehicle in 2023, for which it has around 17,500 pre-orders, but this might never happen according to its latest earnings report.

Indeed, the company says itself that there are “substantial doubts” about its future and its capability to continue ahead with its plans.

This is due to the large amounts of money the company has lost since the beginning of the year. In the first three months of 2022, Canoo apparently spent $125.4 million USD, which is $110 million more than it lost during the same period of 2021. Some of this money was used to create 17 new prototypes, bringing the total of them to 39, and to complete more than 2,000 miles of winter testing in the northern part of the US.

This is very problematic since the company says it only has $104.9 million left in cash and assests, meaning that if it keeps losing money at the same rate and it doesn’t receive a large injection of funds, Canoo will be pushed to bankruptcy in less than three months.

Despite this, the start up has not abandoned its plans to start production next year, when 3,000 to 6,000 units of the Lifestyle Vehicle should be built according to the original plans.

This is very unlikely to happen, although Canoo says it still has $600 million that was set aside specifically to help with the start of production.

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