Canoo (GOEV) stock surges after OKC EV facility gets key approval
Shares of American EV startup Canoo (GOEV) are surging after its Oklahoma City facility received approval as a Foreign Trade Zone (FTZ). The approval will help improve Canoo improve profitability as it scales production.
Canoo (GOEV) gets FTZ status for its OKC EV facility
After throwing a lifeline to keep its shares listed on the NASDAQ with a reverse stock split earlier this month, Canoo’s (GOEV) stock is surging following the approval at its OKC EV facility.
Canoo announced on Monday that the US Department of Commerce approved the plant as an FTZ, sparking the rally. The approval will help accelerate Canoo’s Made in America EV strategy, improve unit profitability, and “enable a faster path to breakeven.”
The plant currently employs around 100 workers but is expected to support up to 1,100 at full capacity.
By securing an FTZ designation, Canoo eliminates all customs duties on vehicles sold overseas and defers of customs duties on imported parts for EVs sold in the US.
Canoo sources over 90% of its parts in the US and free trade partners, with about 70% from North America.
Improving profitability
According to Canoo, the FTZ will “significantly enhance profitability” by lowering vehicle costs by up to 5% on parts imported from other parts of the globe. The cost reductions will be on EVs made in the US and exported overseas, which Canoo intends to announce “in the near future.”
For vehicles sold in the US, FTZ improves working capital “by millions” by derring customs, duties, and tariffs on imports.
Canoo expects additional cost savings through a simplified customs process and streamlined supply chain.
The EV maker is waiting for approval at its other manufacturing plans. If approved, Canoo FTZs will be one of the largest in Oklahoma.
Following the news, Canoo’s (GOEV) stock is up over 50% (+1.06 per share). After hitting an all-time low earlier this month, Canoo shares are bouncing. However, they are still down nearly 80% over the past year.
Electrek’s Take
Like other EV startups (or any growth company), a higher stock price makes it easier to raise funds (via debt) and attract new investors.
Despite the win, Canoo’s finances are still a concern. At the end of September, Canoo had only $8.3 million in cash and equivalents.
The EV maker lost $273.6 million through the first nine months of 2023. Although losses slimmed in Q3, Canoo still lost $112 million.
Canoo CEO Tony Aquila explained that although “we still have things left to prove,” Canoo is now manufacturing and generating revenue. The EV maker posted $519,000 in revenue on its first EV sales.
The EV maker is moving toward hitting 20,000 annual vehicle capacity. Canoo is making progress with the first official customer deliveries of its commercial electric van last month. It also announced that USPS is purchasing six LDV 190 delivery vans as a transition to electric.
Several EV startups like Canoo are struggling amid rising interest rates and more competition entering the market.
Fisker (FSR) announced earlier today that it is pausing production after failing to make an interest payment. The company is halting production for six weeks as it looks to get its finances in order.
Meanwhile, Canoo is serving a different market in commercial vehicles that could prove to be a lifeline to continue operations. With its “Made in America” approach, Canoo expects to benefit from the IRA’s Commercial Clean Vehicle Credit. With that, Canoo customers are eligible for a tax credit of up to $7,500.
As of Q3, Canoo had a +$3 billion order book and $750 million in commited orders (18,000 units).
We’ll learn more about Canoo’s financial situation and oulook for the year when it releases Q4 and full year 2023 earnings later this month.
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EV sales kept up their momentum in December 2024, with incentives playing a big role, according to the latest Cox Automotive’s Kelley Blue Book report.
December’s strong EV sales saw an average transaction price (ATP) of $55,544, which helped push the industry-wide ATP higher, according to Kelley Blue Book. The December ATP for an EV was higher year-over-year by 0.8%, slightly below the industry average, and higher month-over-month by 1.1%. Tesla ATPs were higher year-over-year by 10.5%.
Incentives for EVs remained elevated in December, although they were slightly lower month-over-month at 14.3% of ATP, down from 14.7% in November.
EV incentives were higher by an impressive 41% year-over-year and have been above 12% of ATP for six consecutive months. Strong sales incentives, which averaged more than $6,700 per sale in 2024, were one reason EV sales surpassed 1.3 million units last year, according to Cox Automotive, a new record for volume and share.
(My colleague Jameson Dow reported yesterday, “In 2024, the world sold 3.5 million more EVs than it did in the previous year … This increase is larger than the 3.2 million increase in EV sales from the previous year – meaning that EV sales aren’t just up, but that the rate of growth is itself increasing.”)
Kelley Blue Book estimated that in December, approximately 84,000 vehicles – or 5.6% of total sales – transacted at prices higher than $80,000 – the highest volume ever. KBB lumps gas cars and EVs together into this luxury vehicle category, so this is where Tesla Cybertruck is slotted.
However, Tesla bundles sales figures of Cybertruck with Model S, Model X, and Tesla Semi(!) into a category it calls “other models,” so we don’t know for sure exactly how many Cybertrucks Tesla sold in Q4, much less in December. However, Electrek‘s Fred Lambert estimates between 9,000 and 12,000 Cybertrucks were sold in Q4, and that’s not a stellar sales figure.
What will January bring when it comes to EV ATPs? What about tax credits? Check back in a month and I’ll fill you in.
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Tesla is now claiming that Cybertruck was the ‘best-selling electric pickup in US’ last year despite not even reporting the number of deliveries.
There’s a lot of context needed here.
As we often highlighted, Tesla is sadly one of, if not the most, opaque automakers regarding sales reports.
Tesla doesn’t break down sales per model or even region.
For comparison, here’s Ford’s Q4 2024 sales report compared to Tesla’s:
You could argue that Tesla has fewer models than Ford, and that’s true, but Tesla’s report literally has two lines despite having six different models.
There’s no reason not to offer a complete breakdown like all other automakers other than trying to make it hard to verify the health of each vehicle program.
This has been the case with the Cybertruck. Tesla is bundling its Cybertruck deliveries with Model S, Model X, and Tesla Semi deliveries.
Despite this lack of disclosure, Tesla has been able to claim that the Cybertruck has become “the best-selling electric pickup truck” in the US in 2024:
It very well might be true. Ford disclosed 33,510 F-150 Lightning truck deliveries in the US in 2024 while most estimates are putting Cybertruck deliveries at around 40,000 units.
Those are global deliveries, but Tesla only delivered the Cybertruck in the US, Canada, and Mexico in 2024, and most of the deliveries are believed to be in the US.
However, there’s essential context needed here, as we highlighted in our recent ‘Tesla Cybertruck sales are disastrous‘ article.
First off, Tesla had a backlog of over 1 million reservations for the Cybertruck that it has been building since 2019. This led many to believe Tesla already had years of demand baked in for the truck and that production would be the constraint.
However, based on estimates, again, because Tesla refuses to disclose the data, Cybertruck deliveries were either flat or down in Q4 versus Q3 despite Tesla introducing cheaper versions of the vehicle and ramping up production.
Again, that’s after just about 40,000 deliveries.
Furthermore, with almost 11,000 deliveries in Q4 in the US, Ford more likely than not outsold Cybertruck with the F-150 Lightning in Q4.
Electrek’s Take
Tesla is in damage control here. There’s no doubt that it is having issues selling the Cybertruck.
Inventory is full of Cybertrucks and Tesla is now discounting them and offering free lifetime Supercharging.
Tesla is great at ramping up production, and it’s clear the Cybertruck is not production-constrained anymore. It is demand-constrained despite having over 1 million reservations.
Again, those reservations were made before Tesla unveiled the production version, which happened to have less range and cost significantly more.
The upcoming cheaper single motor version should help with demand, but I have serious doubts Tesla can ramp this program up to more than 100,000 units in the US.
As a reminder, Tesla installed a production capacity of 250,000 units annually and Musk said he could see Tesla selling 500,000 Cybertrucks per year.
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