The Canoo Inc (NASDAQ: GOEV) stock price rallied 18.8% after the EV manufacturer released its Q3 earnings results on Wednesday evening. The company reported a net loss of $117.7 million, a significant increase from the $80.9 million recorded last year.
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The EV firm's adjusted pretax losses narrowed to $80.8 million versus the $85.8 million recorded in Q3 2021. The company reduced its research & development expenditure by about $2 million, but its sales, general and administrative (SG&A) costs surged, as did its depreciation expenses.
However, a positive highlight of the report was the significant surge in pending orders for the company's EVs, which rose to $2 billion, of which $750 million were binding orders, not expressions of interest. Investors cheered the development, which indicates that there is significant demand for Canoo's EVs.
Canoo's largest customer is Walmart, which has ordered 4,500 delivery vehicles, followed by Zeeba, which also has a binding agreement to purchase 3,000 electric vehicles from Canoo. The company's electric vans have cavernous interiors, making them ideal as delivery vans.
The two companies seem convinced that Canoo can deliver the vehicles despite having yet to produce or sell a single car. Luckily for its customers, the EV manufacturer just purchased a vehicle manufacturing facility in Oklahoma City, which will fast-track its path to production in 2023.
Canoo intends to manufacture electric pickup trucks, a lifestyle vehicle and a multi-purpose delivery vehicle (MPDV). However, the company is likely to prioritise the production of the MPDV due to the pending orders.
Tony Aquila, Canoo's Chairman and CEO, commented: “Our Made in America focus has positioned us favorably with the recently announced IRA bill, and we are proud to be one of the only companies that can take advantage of these incentives immediately. Under the backdrop of a volatile market, we will continue to access the capital markets with our just-in-time, milestone-based approach.”
Canoo (GOEV) shares have fallen 85.26% in 2022 and look attractive from a long-term investor's perspective.
