Canoo, the EV startup founded in 2017, has just announced that it is unsure it will be able to continue operating and starting EV production, as it is apparently running out of money. Even though the company has some 17,500 pre-orders, potentially worth up to $750-million, it stated in its Q1 2022 financial results report that as things are going right now, it will run out of cash.
In the Q1 report, the startup announces that it lost $125.4-million in the first three months of 2022 and that it had just $104.9-million left on the last day of March. Now with its projected expenses for the next quarter, expected to be between $95- and $115-million, Canoo could go bankrupt in the next few months.
Gallery: Canoo Lifestyle Vehicle Electric Minivan
The company admits it openly in the report, stating that
Due to the timing of our announced funding, and the 2014 FASB accounting rule, as of the date of this announcement, we are reporting that there is substantial doubt about the Company’s ability to continue as a going concern.
Canoo was looking to begin production of its unique and quite interesting Lifestyle Vehicle, basically an electric people carrier that should be built on the company’s proprietary electric vehicle platform that they were planning on using to underpin several different EV offerings (minivan, cargo van, pickup truck and sports car).
The financial report doesn’t describe the inevitable demise of Canoo, though, as Tony Aquila, Investor, Chairman & CEO at Canoo, explains
We have more than $600 million in accessible capital to support Start of Production (SOP). As operators and investors, we have significant experience raising capital in challenging markets – and the best way to raise capital is to achieve your goals. We will continue to raise when needed, bridge to milestones and be in a position to take advantage of improving market conditions. We are focused on long term value creation for our customers and shareholders.
The company is also reporting that so far it has built 39 Gamma (release candidate) vehicles, double the number it reported in the previous quarter. Canoo was also recently selected by NASA to build a vehicle to carry astronauts to the launch pad with zero emissions, but if it goes under, this project (that is great for its image) will also be in jeopardy.
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