Canoo
Photo courtesy of Canoo

Canoo Will Relocate LA Headquarters to Arkansas, Posts Growing Losses in Q3

Electric vehicle maker Canoo is abandoning its Torrance headquarters for Walmart's home turf.

The company announced as part of its third quarter earnings call Nov. 15 that it will soon move its corporate headquarters to Bentonville, Arkansas as it moves up their production timeline.

Canoo CEO Tony Aquila said the electric vehicle maker will also base manufacturing and research and development facilities in Fayetteville, Arkansas and expand existing factory space in Pryor and Tulsa, Oklahoma to handle more of its software development, finance and customer service operations.

"Our discipline continues to be big news or no news. Therefore, we will accelerate our advanced manufacturing production in the U.S. to begin before Q4 2022," Aquila said in an earnings statement.

Canoo CEO Tony Aquila

Canoo CEO Tony Aquila

Part of the incentive for Canoo to move operations to these two states is agreements it inked with each of them that would guarantee financial incentives of roughly $400 million. That is on top of an additional nearly $100 million in vehicle orders Canoo expects to come from states and local universities, Aquila said.

Aquia said he expects the facilities to employ 1,200 people in the region.

"We are bigger fans of owning our own facilities than we are contract manufacturing, there are inherent risks with that (and) having it out of your control," Aquila added.

The move is a loss for Southern California, which has been home to a clutch of electric vehicle startup companies including Fisker, Karma and Faraday Future. Canoo still has yet to deliver any of its planned vehicles and is looking for an area that's cheaper than Los Angeles to do business in and cut costs.

Aquila said in the statement Canoo most of the company's manufacturing will happen at a facility in Pryor, Okla. which Canoo announced earlier this year.

To meet production demand, Canoo said it expanded its workforce by 22% to about 800 people by the close of the third quarter. In October, the carmaker said that Panasonic will supply batteries for its upcoming electric SUV.

The company is working on its main car, a boxy, electric "lifestyle vehicle" it describes as a "loft on wheels'' that it aims to begin selling by next year. It's also developing an all-electric pickup truck and multi-purpose delivery vehicle for businesses. In the industrial space, Canoo has a handful of competitors already closer to delivering, though -- including Glendale-based Xos Trucks, which already has an agreement to deliver 120 electric trucks to FedEx Ground by the fourth quarter of this year.

The carmaker reported no revenue this quarter, compared to the same time last year, when the company brought in nearly $2.6 million. Instead, operating losses mounted, increasing to roughly $107 million from roughly $27.2 million in Q3 2020.

Canoo's net loss for the third quarter was roughly $80.9 million, up from a net loss of $23.4 million last year.

Canoo said it expects operating expenses in the upcoming quarter to be between $95 and $115 million, and estimated it'll spend between $60 and $80 million in capital expenditures during that time.

While Canoo's stock was down at market close today, it was up at least 4.7% in after-hours trading to roughly $8.72 per share as the news of its new headquarters and deals outside California reached investors.

To meet production demand, Canoo said it expanded its workforce by 22% to about 800 people by the close of the third quarter.

Editors note: This story has been updated with comments from Aquila.

https://twitter.com/samsonamore
samsonamore@dot.la

Subscribe to our newsletter to catch every headline.

Cadence

When Darien Williams and Melanie Wolff opened Brella, their Montessori-inspired childcare center, in Playa Vista in 2019, they were inspired by the likes of WeWork and SoulCycle, which had multiple locations and easy-to-use apps for scheduling meetings and workout sessions. The pair found that parents juggling hectic day jobs with their children’s preschool schedules were drawn to a tech-enabled, more flexible way to schedule childcare for their kids.

Read more Show less
Keerthi Vedantam

Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.

Despite — or in many cases because of — the raging pandemic, 2020 was a great year for many tech startups. It turned out to be an ideal time to be in the video game business, developing a streaming ecommerce platform for Gen Z, or helping restaurants with their online ordering.

But which companies in Southern California had the best year? That is highly subjective of course. But in an attempt to highlight who's hot, we asked dozens of the region's top VCs to weigh in.

We wanted to know what companies they wish they would have invested in if they could go back and do it all over again.

Read more Show less
Ben Bergman

Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.

https://twitter.com/thebenbergman
ben@dot.la
RELATEDTRENDING
LA TECH JOBS
interchangeLA