JUSTIN, Texas - Canoo Inc. (NASDAQ: NASDAQ:GOEV), a company specializing in electric vehicles, has achieved a significant milestone by securing final activation of its Oklahoma City operations as a Foreign-Trade Zone (FTZ), as announced today. This status, granted by the U.S. Customs and Border Protection, allows Canoo to benefit from tariff exemptions and deferrals, enhancing its competitive edge as it expands globally.
The FTZ designation is effective immediately and is expected to reduce Bill of Materials (BOM) costs by 5% for imported parts, improving the company's margins. Canoo's Oklahoma City facility, now one of the largest FTZs in the state, will streamline operations and provide financial and logistical advantages, particularly as Canoo scales the production of its modular electric commercial vehicles.
Canoo has been working with the U.S. Customs and Border Protection for approximately a year to secure this FTZ activation, with initial approval received in March 2024. The company completed the necessary infrastructure requirements to achieve this final activation milestone, which is part of a broader strategy to harmonize its supply chain and mitigate the impact of international tariffs.
Tony Aquila, Investor, Executive Chairman, and CEO of Canoo, expressed gratitude towards the Oklahoma City Customs Port Director and the Dallas U.S. Customs and Border Protection Area Port office for their support in achieving this milestone. He emphasized that this step is crucial for the company's larger strategy, with more developments expected in the future.
Canoo, founded in 2017 and headquartered in Justin, Texas, focuses on creating design-forward electric vehicles with steer-by-wire technology on a common modular platform. The company aims to serve commercial, government, and fleet customers in the U.S., the United Kingdom, Europe, and the Middle East.
This news is based on a press release statement and investors are advised to consider the forward-looking nature of this announcement, which is subject to various risks and uncertainties detailed in Canoo's filings with the U.S. Securities and Exchange Commission.
In other recent news, Canoo Inc. reported record revenue of $605,000 for Q2 2024 and a significant cash outflow reduction of 50% compared to the same quarter in 2023. The company also secured a financial agreement with Yorkville, providing a cash advance of over $25 million. This is in addition to the previously established Prepaid Advance Agreement, allowing Canoo to request advances up to a total of $100 million.
Canoo's strategic advancements include delivering right-hand drive LDV 190s to the USPS and revenue recognition from the DoD DIU battery testing program. The company received approval for full activation of the OKC facilities' Foreign Trade Zone designation, which could offer certain tax advantages. Furthermore, both H.C. Wainwright and Roth/MKM revised their outlook on Canoo, maintaining a Buy and Neutral rating respectively, but reducing the price target due to a delayed production start.
These recent developments highlight the company's continued growth and strategic progress. However, despite the positive developments, the company's management has guided for an Adjusted EBITDA loss ranging between $120 million and $140 million for the second half of 2024.
InvestingPro Insights
As Canoo Inc. (NASDAQ: GOEV) secures its Foreign-Trade Zone status and looks to bolster its position in the electric vehicle market, it's crucial to understand the financial health and market performance of the company. According to InvestingPro data, Canoo has a market capitalization of $85.89 million, indicating its size within the industry. While this milestone may improve operational efficiencies, Canoo's significant debt burden and challenges in generating gross profit, with a gross profit margin of -182.96% for the last twelve months as of Q2 2024, suggest ongoing financial pressures.
Investors should note that the company's price has seen a substantial decline, trading at only 9.01% of its 52-week high, reflecting market sentiment and performance challenges. The stock's recent performance also shows a notable downtrend, with a 1-week total price return of -15.32% and a 1-month return of -25.0%. These figures underscore the volatility and the bearish trend that Canoo has been experiencing.
An InvestingPro Tip highlights that analysts do not anticipate Canoo will be profitable this year, which aligns with the reported operating income margin of -14658.95%. This, coupled with the fact that the company is trading at a high revenue valuation multiple, suggests that investors are pricing in the growth expectations rather than current profitability.
For those considering an investment in Canoo, it's worth noting that there are additional InvestingPro Tips available, providing deeper insights into the company's financial health and market performance. These tips can offer valuable guidance in assessing Canoo's potential risks and opportunities as it navigates the competitive electric vehicle landscape.
For a more comprehensive analysis, including additional InvestingPro Tips that could help inform investment decisions, visit: https://www.investing.com/pro/GOEV
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