Electric Vehicle Maker Canoo Discloses ‘Substantial Doubt’ About Its Future

Electric vehicle manufacturer Canoo disclosed in a Monday (April 1) annual report that its management has identified “substantial doubt” about the company’s ability to continue as a going concern.

The company requires additional capital but has found that its ability to raise it could be impaired, according to the annual report.

“Our management has performed an analysis of our ability to continue as a going concern and has identified substantial doubt about our ability to continue as a going concern,” the company said in its annual report. “If we are unable to obtain sufficient additional funding or do not have access to capital, we may be required to terminate or significantly curtail our operations.”

The company added that its management continues to explore raising additional capital but that its ability to finance its operations through the sale and issuance of additional debt or equity securities or through bank or other financing could be impaired.

“As of the date of this report, we believe that our existing cash resources and additional sources of liquidity are not sufficient to support planned operations for the next 12 months,” the annual report said. “Our ability to continue as a going concern will depend on our ability to obtain additional capital.”

Canoo lost $29 million in the three months ended Dec. 31, 2023, and $302.6 million for the 12 months ended on that date, the company said in a Monday earnings release. Those figures were down from $80.2 million and $487.7 million, respectively, for the same time periods in 2022.

Its cash and cash equivalents totaled about $6.4 million on Dec. 31, down from about $36.6 million a year earlier, according to the release.

Canoo went public in 2020, saying it aimed to design a new generation of sustainable cars.

In August 2022, it completed a pilot program with Walmart in which Canoo’s delivery vehicles were used to make last-mile deliveries in the Dallas-Fort Worth area for the retailer’s eCommerce business.

Its latest announcement comes at a time when automakers are anticipating a slower rate of growth in sales of electric vehicles, in part because mainstream consumers are less eager than the early adopters to transition to the new technology.

In February, Apple abandoned its electric vehicle plans, sunsetting an effort that began in 2014 and consumed billions of dollars.