Startup EV Canoo has hired hundreds of employees and is heading towards a production date, but critical milestones, including the arrival of a battery supplier, remain, according to the second quarter earnings report of the company.
Canoo’s earnings report comes just weeks after the company’s first day of investor relations, when it named Dutch company VDL Nedcar as a contract manufacturing partner for its lifestyle vehicle. At the time, Canoo estimated that the Nedcar plant would build up to 1,000 units in 2022 for the US and European markets, with a target of 15,000 units in 2023. In Monday’s earnings call, CEO Tony Aquila said the company now expects 25,000 units in 2023..
Canoo also provided updates on his plans to build a US-based factory, which he describes as a “mega micro-factory” for his pickup truck and multi-purpose delivery vehicle. In June, the EV startup announced plans to build its first factory in Oklahoma. The state has committed $ 300 million in non-dilutive financial incentives to support the installation and phase 2 manufacturing.
“This two-pronged strategy is important for several reasons,” Aquila said during Monday’s call for results. “As a new OEM, working with Nedcar will allow us to refine our manufacturing process. While increasing our production expertise, which will be deployed in our Oklahoma manufacturing facility, this will allow us to geographically diversify our manufacturing operations and position ourselves to increase our commitments, products and volumes in order to adapt to the changing market demands and strengthening the flexibility of distribution.
Aquila said about a third of Oklahoma’s investment will be available within the first 36 months. These funds will help the company move forward into its Gamma phase, which means Canoo is preparing to go ahead. Year over year, Canoo has grown its workforce from 230 to 656 total employees, 70% of which are hardware and software engineers. The startup’s operating expenses fell from $ 19.8 million to $ 104.3 million year-on-year, with the majority of that increase coming from R&D.
The increase in spending before revenue is a signal that Canoo is pursuing its production targets, but there is still work to be done before construction begins on the Oklahoma plant. Aquila said Canoo was in the process of selecting a construction manager, architect and engineering company and would likely have more updates on construction progress by the next quarter.
The company is still working to make a final decision for a battery partner in the third quarter, a decision that becomes increasingly important as more traditional OEMs strive to control their supply chain with joint ventures. of batteries. Canoo also grapples with semiconductor supply chain issues, like the rest of the industry, but says its streamlined manufacturing process means its vehicles will require fewer chips to run.
On IR Day, Canoo announced that it had completed 500,000 miles of beta testing. As of June 30, Aquila said the company had engaged in engineering and design to begin “gamma” constructions.
“We also bought 87% of the components, up from 74% in the first quarter of the year, and excluding bulk materials, we are at 95% of the supply,” Aquila said. “Our CTO and his team completed the engineering design of 67% of the lifestyle vehicle components and moved them to tooling. ”
Aquila said Canoo will begin its countdown to standard operating procedure for its lifestyle vehicle in the fourth quarter. The Lifestyle Vehicle is likely closer to production, but Aquila said of the 9,500 non-refundable pre-orders, pre-orders for Canoo’s other two vehicles, the Pickup Truck and the Versatile Delivery Vehicle, are the most. popular.