Electric vehicle manufacturer Canoo delivered a disappointing forecast for its 2024 revenue on Monday, falling well below analyst expectations. This comes amidst a broader slowdown in the demand for battery-powered cars, impacting startups and leading major automakers to revise their EV investment plans. Canoo’s shares tumbled 38% in extended trading following the announcement.
The EV industry is grappling with challenges, including high-interest rates aimed at curbing inflation, which have dampened consumer interest in EVs – typically priced higher than their gas-powered counterparts. In response, automakers, including industry leader Tesla, have slashed prices to stimulate demand.
Canoo, based in Texas, specializes in electric delivery vans for Walmart and crew transportation vehicles for NASA. The company has been warning investors for eight consecutive quarters about its diminishing capital and the need for additional funding to sustain operations.
“We will continue to make progress towards accessing additional forms of debt and other non-dilutive forms of capital as we move into 2024,” said CFO Greg Ethridge during a post-earnings call. “Let’s be very clear. We’ll only raise the capital that we need.”
Despite efforts to secure funding, the uncertain demand and closures of several EV startups have made investors cautious, making it challenging for firms to raise capital.
Fisker, facing financial strain, recently disclosed that talks with a major automaker for a potential deal had collapsed. Additionally, the New York Stock Exchange announced plans to delist Fisker’s shares due to “abnormally low” price levels.
Canoo, which executed a reverse stock split in March to regain compliance with Nasdaq’s minimum $1 bid price requirement, expects its full-year 2024 revenue to range between $50 million and $100 million, falling short of analysts’ expectations of $152.5 million.
For the year ended Dec. 31, Canoo reported a net loss of $302.6 million, or 53 cents per share, compared to $487.7 million, or $1.81 per share, in the previous year.
The outlook for Canoo and other EV manufacturers remains uncertain as they navigate challenges in the market, seeking to secure funding and maintain operations amidst changing consumer preferences and market dynamics.
