Canoo, an American electric vehicle manufacturer formerly known as Evelozcity, finds itself in dire financial straits, revealed by its latest financial report. Despite its ambition to produce electric utility vehicles, significant doubts loom over the company’s sustainability. With a modest tally of 23 vehicles sold, Canoo’s financial woes are further exacerbated by the luxurious travel habits of its CEO, which have drained millions from its coffers.
Persistent Financial Doubts
The publicly traded entity disclosed its operating results for the fourth quarter and the entirety of 2023 on Monday. This mandatory report highlighted the company’s struggle to establish a stable mass production line while burning through substantial funds. Notably, the document casts serious doubts on Canoo’s continuity, mirroring the recent fate of another US startup, Arrival.
In 2023, Canoo managed to sell only 22 vehicles, including sales to NASA and the State of Oklahoma, generating mere revenue of $886,000. After accounting for its enormous expenses, the company reported a net loss of approximately $302.6 million, albeit an improvement from the prior year, which saw zero revenue and expenses amounting to $506 million.
The company has projected revenues between $50 to $100 million for the current year. However, internal skepticism persists regarding the feasibility of this target, with Canoo warning of potential operational discontinuation due to financial constraints.
Lavish Expenditures Questioned
The root of Canoo’s financial predicament may partly lie in CEO Tony Aquila’s extravagant travel practices, funded by the startup. A closer examination by “Techcrunch” of the company’s finances uncovered that in November 2020, Canoo agreed to reimburse Aquila Family Ventures, owned by Aquila, for the use of an aircraft. This agreement led Canoo to spend about $1.7 million on flight costs in 2023 alone—surpassing its total revenue for the year. Payments for the private jet‘s use in previous years were similarly exorbitant.
Additionally, aside from the aircraft costs, Canoo compensated Aquila Family Ventures $1.7 million in 2023 for “shared services at the corporate headquarters” in Justin, Texas, with previous years’ payments also amounting to significant sums. The nature of these services remains unspecified, and the financial implications are substantial, especially if Canoo fails to meet its optimistic revenue forecast for 2024. Neither Canoo nor Aquila has provided comments on these findings.
Focusing on Electric Utility Vehicles
Canoo was initiated by former BMW and VW executives with a vision distinct from the creation of flashy electric sports cars, aiming instead to produce practical vehicles such as minibusses. Its first model, a van named after the company itself, epitomizes this vision, alongside utility vehicles like the LDV. Canoo’s vehicles have found application at notable locations such as the Kennedy Space Center in Florida, serving astronauts involved in the Artemis Moon mission.
Tony Aquila, who took the helm as CEO in March 2021, brought both Italian and Lebanese heritage into the leadership mix. Having contributed venture capital to Canoo and served on its board since 2020, Aquila’s financial maneuvers and the sustainability of his leadership amidst Canoo’s financial turmoil remain a focal point of interest and concern.
As Canoo navigates these troubled waters, the automotive industry and investors alike watch closely, awaiting the company’s next move and hoping for a turnaround that secures its place in the electric vehicle market.
