US startup EV Canoo has shared its latest report outlining its results for the second quarter of 2022 as it continues to fight to stay out of red in a race to production. Canoo now reports another big loss for the quarter. And, while it has $1 billion in its sales pipeline, only a minority percentage of those engagements are contractual.
Canoo ($GOEV) is a Los Angeles-based EV startup founded in 2017 by two former Faraday Future employees. The automaker has several electric vehicles in the works, but plans to launch its Lifestyle Delivery Vehicle (LDV) first.
A modified version of the Canoo LDV was chosen to ferry future Artemis mission astronauts to the launch pad under a contract recently awarded by NASA, and Walmart signed a contract in July to order up to 10,000 LDV starting with priority deliveries in the first quarter of 2023. .
The news was welcomed after Canoo’s first quarter report showed a net loss of $125 million and “substantial doubt” that the startup could continue. Canoo has worked to lean this quarter, readjusting its production strategy while continuing to test its LDV for road certification as it works its way to the SOP.
Three months after its troubling first quarter report, Canoo is still struggling and has promising sales in its backlog, but the second quarter also includes another big net loss, leaving the startup with even less of a track to work on.
Canoo announces a loss of $164.4 million in the second quarter of 2022
According to its press release coinciding with its second quarter 2022 investor presentation, Canoo reported a net loss of $164.4, compared to $112.6 million in the second quarter of 2021. Additionally, Canoo shared that it had cash and cash equivalents of $33.8 million as of June 30, 2022. Canoo President and CEO Tony Aquila spoke on the call:
We have over $1 billion in our sales pipeline, which includes our recently announced commercial order. We successfully completed 90% of our structural crash testing during the quarter and are now entering the final phase of Federal Motor Vehicle Safety Standard certification. We navigated a challenging global economic environment in the first half and will continue to take a disciplined, long-term, strategic and focused approach to delivering our announced built-in-America vehicles, which are for and by America First with the intention to make electric vehicles accessible to everyone. We also introduced the first phase of our stage-based, just-in-time approach to accessing capital markets, which helps us as we continue to benefit from access to non-dilutive capital. We are moving towards the start of production in the fourth quarter and our product is resonating with the most demanding customers.
The $1 billion in potential sales is encouraging, but according to Canoo, only 5,500 (17%) of the units discussed are committed sales under contract. The other 27,000 EVs on order are refundable and non-binding.
Nevertheless, the company remains optimistic based on these potential orders and continues to say that it has access to more capital through the following methods:
- Concluded a $300 million prepaid advance (PPAA) agreement with Yorkville Advisors
- Canoo drew its first $50 million advance
- Filing of an At-The-Market (ATM) offer program for $200 million
- Filing for an additional $300 million universal registration
In addition to the $33.8 million in cash and cash equivalents, the EV startup says it has access to approximately $220 million in spare capacity through a reserve share purchase agreement (SEPA) filed with the SEC last May.
Looking ahead, Canoo shares the following business outlook for the remainder of 2022, as it continues to target an LDV production start in Q4 2022:
- Operating expenses (excluding stock-based compensation and amortization) of $200M to $245M
- Capital expenditures totaling $100M to $125M
Here is a link to Canoo’s full Q2 2022 presentation.
Subscribe to Electrek on YouTube for exclusive videos and subscribe to the podcast.