EV maker Canoo (GOEV) is raising cash again after running low on funds as it works to reach full production. However, as evident by Canoo’s falling stock price this morning, investors are not thrilled with the deal.
Canoo (GOEV) stock falls on stock sale
Since its foundation in 2017, it hasn’t been all sunshine and rainbows for young EV maker Canoo.
After posting an over $125 million net loss in the first quarter of 2022 and another $164 million loss in Q2, Canoo expressed substantial doubt it would be able to continue operations.
Its luck turned shortly after, partnering with major retailers and other organizations, like NASA and the US Army, and like Walmart for a supply agreement for up to 10,000 Lifestyle Delivery Vehicles (LDVs).
Meanwhile, Canoo’s financial woes have continued. Despite implementing several cost control measures throughout 2022, producing a low volume of EVs (or any vehicle) while trying to ramp production is a costly activity.
Despite reducing cash burn by 25% and securing additional sources of funding, Canoo said it was still running low on cash in November, mentioning it may need to raise funds by selling new stock.
With this in mind, Canoo said in a press release today it has entered into definitive agreements with certain (undisclosed) institutional investors for the purchase and sale of 50,000,000 shares of Canoo common stock together with warrants.
The investors can purchase the shares for a price of $1.05 per share and can exercise the accompanying warrant for $1.30 per share.
Canoo will bring in approximately $52.5 million in gross proceeds, using it for “general working purposes.” The EV maker is set to receive $1 million in incentives if it creates the 500 or more high-paying jobs it intends to at its Oklahoma City manufacturing plant.
GOEV stock is down over 10% today as investors digest the news, while Canoo shares are down over 80% in the past year.
Electrek’s Take
On the one hand, Canoo continues to free up funds as it works to reach full production capacity. The EV maker is creating an IP library with over 200 patents total while building out its domestic manufacturing footprint. In addition, Canoo looks to benefit from the Inflation Reduction Act, with 92% of its platform sourced from the US or allied nations.
But, and this is a big but, current investors can see significant dilution (again), hence the drop in stock price, with the potential for up to 100 million new shares.
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China’s CATL launched its new Bedrock Chassis on Monday, calling it “the world’s first ultra-safe skateboard chassis.” The global EV battery leader said its newest tech “activates a trillion yuan market” as the new standard for intelligent vehicle design. According to CATL, it will also end the belief that gas-powered cars are safer than EVs.
CATL launches the world’s first ultra-safe EV chassis
On December 24, CATL officially launched the new Bedrock Chassis with “outstanding” safety performance. The company proved it in a video presented during the launch event.
The video showed a prototype model’s front impact at 120 km/h (about 75 mph) without exploding or catching fire. CATL claims its newest tech “sets a new standard for intelligent chassis safety” with comprehensive protection across all scenarios and speed ranges.
According to CATL, the Bedrock Chassis passed the world’s first “highest speed +strongest impact” dual extreme safety test.
In China, the commonly used speed for frontal impact safety tests in the C-NCAP (China New Car Assessment Program) is 56 km/h (35 mph).
At that speed, the collision generates energy equivalent to falling from a 12-meter-high (39-foot) building. At 120 km/h, it’s like dropping 56 meters (183 feet). According to CATL, the collision energy is 4.6 times greater.
During the launch, Ni Jun, CATL’s chief manufacturing officer, said, “Safety is the core of CATL—it’s part of our DNA.”
A trillion yuan market
There has been no previous instance of a new energy vehicle (NEV) “daring to challenge a 120 km/h frontal pole impact test,” the company said during the event.
With a battery-centered design, CATL’s new Bedrock Chassis directly integrates the battery cells into the unit. The design enables it to absorb 85% of the vehicle’s collision energy compared to about 60% by a traditional chassis.
The unit features an “ultra-safe battery cell design,” disconnecting the high-voltage circuit instantly within 0.01 seconds. It will then complete the vehicle’s residual high-voltage energy discharge within 0.2 seconds, a new industry record.
CATL boasted that its new chassis design “paves the way for the industry,” but more importantly, “it also overturns the conventional belief that gasoline vehicles are safer than NEVs.”
The global EV battery leader claims its new Bedrock Chassis “activates a trillion yuan market” and will accelerate the shift toward modular, personalized, intelligent vehicle design. At the launch event, CATL revealed that AVATR will be the first automaker to use the new tech.
CATL is on a “never-ending journey” to create safer batteries and vehicles to accelerate the industry’s shift to EVs.
The news comes after CATL revealed ambitious plans to expand its EV battery swap network last week with its new “Chocolate” SEB batteries. CATL aims to phase out gas stations over the next few years as it rapidly expands battery swap stations across China.
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Construction at BYD’s new EV plant in Brazil was suddenly halted Monday after authorities found Chinese workers in “slavery-like” conditions. The workers were hired in China by another firm, and BYD has since cut ties.
Why construction at BYD’s EV plant in Brazil is halted
According to a statement from the Public Ministry of Labor (MPT), 163 workers at the construction site of BYD’s new EV plant in Salvador, Brazil, were “being held in conditions analogous to slavery.”
Construction on the site was halted on Monday after the findings. According to the authorities, Jinjiang Group, one of the contractors BYD hired to build the new EV plant, hired the workers in China.
BYD released a statement saying it has cut ties with Jinjiang and is assisting the victims as it works with Brazilian authorities. All workers will be transferred to hotels. They will not be able to work and will have their contracts terminated.
Alexandre Baldy, senior vice president of BYD Brazil, said the company remains “committed to full compliance with Brazilian legislation, especially with regard to the protection of workers’ rights and human dignity.”
The MPT statement detailed the extreme “slavery-like” worker conditions. For example, they had one bathroom for every 31 workers, forcing them to wake up at 4 am to get in line to be ready for work at 5:30 am. They slept without mattresses on the bed, and the kitchens operated in “alarming conditions.”
If a worker quit after six months, they would leave the country without any pay after factoring in the cost of a round-trip airplane ticket.
BYD said it has held a “detailed review” over the past few weeks. The Chinese EV giant asked Jinjiang several times to improve the conditions.
A joint virtual hearing of the MPT and MTE is scheduled for December 26. The MPT said the need for new “on-site inspections” has not been ruled out. BYD’s new EV plant is set to begin production next year. Check back soon for more updates on the situation.
BYD is already a top-selling EV brand in Brazil. In October, it launched its first pickup, the Shark PHEV. The pickup is BYD’s sixth vehicle in Brazil, joining other popular models like the Dolphin Mini (Seagull), Yuan Plus, and Dolphin.
Source: Bloomberg, Brazil Public Ministry of Labor
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