EV startup Canoo’s 2024 revenue forecast disappoints, shares tumble

02 April 2024 - 07:59
By Reuters
Texas-based Canoo, a supplier of electric delivery vans to Walmart and crew transportation vehicles to Nasa, first warned investors in 2022 on substantial doubt about its ability to remain a going concern and has since been raising capital to support production.
Image: Canoo Texas-based Canoo, a supplier of electric delivery vans to Walmart and crew transportation vehicles to Nasa, first warned investors in 2022 on substantial doubt about its ability to remain a going concern and has since been raising capital to support production.

Electric vehicle maker Canoo forecast 2024 revenue well below analyst expectations on Monday amid a broader slowdown in demand for battery-powered cars that has hit startups and forced major carmakers to push back EV investment plans.

Shares in Canoo, which also warned for the eighth straight quarter about its dwindling capital and ability to continue as a going concern without additional funding, fell 38% in extended trading.

The EV industry has been struggling as high interest rates to curb inflation have soured consumer appetite for EVs - typically more expensive than their petrol-powered counterparts - and prompted carmakers, including market leader Tesla, to slash prices to stoke demand.

Texas-based Canoo, a supplier of electric delivery vans to Walmart and crew transportation vehicles to Nasa, first warned investors in 2022 on substantial doubt about its ability to remain a going concern and has since been raising capital to support production.

"We will continue to make progress towards accessing additional forms of debt and other non-dilutive forms of capital as we move into 2024," CFO Greg Ethridge said on a post-earnings call.

"Let's be very clear. We'll only raise the capital we need."

However, with uncertain demand and several startups shutting shop, investors in EV makers have grown cautious, in turn making it difficult for firms to raise more money.

Cash-strapped Fisker said last month its talks with a large carmaker for a potential deal had collapsed and the New York Stock Exchange said it planned to delist its shares due to "abnormally low" price levels.

Canoo had also implemented a reverse stock split in March as it sought to regain compliance with the minimum $1 (R18.9) bid price requirement of the Nasdaq exchange.

Canoo said it expects full-year 2024 revenue to be between $50mn (about R946,217,500) and $100nn (about R1,892,435,000), below analysts' expectations of $152.5m (about R2,885,940,500), according to LSEG data.

The company reported a net loss of $302.6m (about R5,726,462,920), or 53c (R10) per share, for the year ended December 31, compared with $487.mn (about R9,229,332,340), or $1.81 per share, a year earlier.