Canoo, an EV maker, reports smaller-than-expected loss due to reduced costs.
Canoo, an EV maker, reports smaller-than-expected loss due to reduced costs.
Canoo Posts Smaller-Than-Expected Quarterly Loss, Unveils New Delivery Vehicle
Aug 14 (ANBLE) – Electric-vehicle maker Canoo (GOEV.O) surprised the market by posting a smaller-than-expected quarterly loss, which resulted in a 2% increase in its share price during extended trading. The company’s improved financial performance was primarily attributed to lower research and development costs. In addition to the positive financial results, Canoo also unveiled its newest addition to its lineup, the lifestyle delivery vehicle 190. This new vehicle boasts an increased payload load capacity and body length compared to its predecessor, the lifestyle delivery vehicle 130.
Canoo’s loss for the quarter narrowed substantially, going from $164.4 million in the second quarter of the previous year to $70.9 million. On an adjusted basis, the company reported a loss of 14 cents per share, surpassing expectations of a loss of 19 cents, according to Refinitiv data. This positive deviation from estimates was further bolstered by a significant 67% reduction in research and development costs, which contributed to a decline in overall operating expenses from $173.5 million to $73.6 million.
Despite the positive financial results, Canoo expressed concerns about its ability to sustain operations for the next twelve months. These concerns are not uncommon among EV startups, as the uncertain economy and a slowdown in demand have taken a toll on their market valuations and funding opportunities. Canoo’s cash and cash equivalents dwindled to $5 million as of June 30, compared to $36.6 million at the end of December. As a result, prudent financial management and strategic decision-making will play a crucial role in the company’s future success.
Looking ahead, Canoo expects to incur capital expenditures of $70 million to $100 million in the second half of 2023. Despite the challenges, Canoo has managed to secure contracts with prominent organizations such as the U.S Defense Department, Walmart, and the National Aeronautics and Space Administration (NASA). These contracts involve the supply of advanced battery packs and electric vehicles, demonstrating Canoo’s ability to establish itself as a trusted player in the industry.
Canoo CEO Tony Aquila expressed optimism about the company’s future prospects, stating, “We entered the revenue and income generation phase with the advancement of our contract with the Department of Defense, and we delivered vehicles to NASA.” Aquila’s confidence in the company’s revenue generation capabilities reflects Canoo’s commitment to delivering innovative solutions and establishing fruitful partnerships.
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Despite the challenges faced by the EV industry as a whole, Canoo’s financial performance and its ability to secure significant contracts highlight its resilience and potential for future growth. The unveiling of the lifestyle delivery vehicle 190 also demonstrates the company’s commitment to continuous innovation and meeting evolving customer demands. As Canoo navigates through these uncertain times, its ability to adapt, execute strategic initiatives, and build upon its existing contracts will be pivotal in its journey towards long-term success.
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