Will Apple come to the rescue of a tumultuous Tesla rival?

Will Apple come to the rescue of a tumultuous Tesla rival? ...

The next few months will be crucial for Canoo (GOEV) - Get Canoo Inc. Class A Report, the upstart manufacturer of electric automobiles.

A slew of worries has struck the horizon, as well as the one of the most automobile manufacturers.

Due to the Russian invasion of Ukraine, semiconductor shortages are becoming more common. Supply-chain disruptions continue, as lockdowns in cities across China continue, and raw-materials prices are still high.

These three factors increase the cost of manufacturing automobiles, particularly when it comes to complete production, forcing automobile associations to look into their initial projects.

The current rout in financial markets due to rising recession worries is also bad news. This is because investors are even more cautious about betting on companies that are currently not producing profits and therefore do not distribute dividends.

Canoo promises growth in exchange for investors'' confidence and funds. This promise might not be sufficient in the present situation.

Canoo Soon May Run Out of Money

The Torrance, Calif., business has just warned that it may run the risk of running out of money in the coming months.

"Due to our anticipated funding and the 2014 [Financial Accounting Standards Board] accounting rule, as of the date of this announcement, we are reporting that there is substantial doubt about the company''s ability to continue as a going concern," Canoo said to investors on May 10 when it published its first-quarter earnings.

"Substantial doubt" is a form that listed firms must include in their financial disclosures when they aren''t certain that they can fulfill their financial obligations within the next 12 months.

"To sit here and say for sure we can pay our bills in 12 months, that depends on so many factors when it comes to prerevenue and things," said CEO Tony Aquila.

Canoo had a net loss of $125.4 million for the first quarter, which was reduced from $15.2 million for the first quarter of 2021.

In the present quarter, the electric-truck manufacturer said it expects operating expenses (excluding stock-based compensation and amortization) of $95 million to $115 million. Capital expenditures should be between $85 million and $105 million.

Canoo will need at least $180 million to fund its operations in the present quarter. The company claimed that it had only $104.9 million on hand.


Aquila sat down to assure investors that Canoo had access to fresh capital.

"To begin with, we reached a $250 million equity-purchase agreement with Yorkville Advisors," the CEO told analysts during the earnings'' announcement.

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"We have a commitment for an existing shareholder for a $50 million [private investment in public equity] for the second time, further demonstrating long-term support and belief in the company."

"We filed a $300 million shelf, increasing our total access capital to $600 million, and increasing our financial needs to [start of production].

"We are in ongoing discussions with parties in terms of financing additional as it makes sense based on our disciplined approach to managing our execution plan."

Apple May Make an Offer

Canoo is also dealing with problems to meet its production goal for 2022. In the last three months, the company had promised to produce between 3,000 and 6,000 automobiles. Since March 31, only 39 vehicles have been shipped, and 17 are on the road. But fears have arised over its production objective.

"Supply-chain issues have worsened, especially as things on the geopolitical arena have heated up. We are still in the process of achieving on-time delivery of 26% of the semiconductor chips needed," Aquila said during the call.

"We anticipate to achieve [beginning of production" in Q4 2022. What remains unclear is whether we will meet our total limit of 3,000 units to 6,000 units,," the CEO said.

Get Apple Inc. Report, which is currently working on its own vehicle project, is speculated on a merger of Apple and its competitors.

According to Bloomberg, Apple and Canoo have had discussions in the past. Ulrich Kranz, the former CEO of Canoo, is one of the most well-known executives on the Apple Car Project.

The Cupertino, Calif., technology firm is particularly interested in Canoo engineers for their knowledge in software, automotive manufacturing, drive trains, battery technology, and automobile interiors and exteriors.

Apple did not respond to a request for clarification immediately.


Canoo hasn''t commented on the speculation yet.

Canoo: Models and Specifications

Canoo, which was established in 2017, is developing electric automobiles. One of its innovations is a multifunctional minivan, the prototype of which was unveiled in 2019. Its sleek and futuristic design, combined with its multiple functionalities, had increased attention a lot. It''s the Lifetsyle, which is Canoo''s most popular vehicle.

The passenger area at the rear drew attention, with a bench seat that is similar to a sofa, and a vast central area.

The car will be available in four versions: Basic, Premium, and Adventure. The first two are designed for quick-paced city journeys, with their seats of five to seven people, a panoramic glass roof, and side windows enveloping the entire cabin at the rear.

The other two models are intended for specific situations.

The Adventure will be a dark green, more hazy version of the classic model. It may be transformed into a pickup version.

The delivery is unable to afford the rear bench seat, which allows you to go further away from a traditional utility vehicle with a more rectangular model and no panoramic windows.

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