Canoo Faces Tough Choices With More Worker Furloughs, Production Halts — But Retail Sees Glimmer Of Hope
The company said it is currently in advanced talks with various capital sources.
FollowShares of Canoo, Inc. (GOEV) dropped more than 10% Thursday afternoon after the electric cargo vehicle manufacturer announced a series of difficult steps to keep its operations moving forward.
Late Wednesday, Canoo revealed that it had temporarily furloughed 82 salaried and hourly employees, and suspended its manufacturing operations in Oklahoma.
The company explained these actions were necessary while it works to secure the capital required for continued operations.
Canoo said it is currently in advanced talks with various capital sources.
"We regret having to furlough our employees, especially during the holidays, but we have no choice at this point. We are hopeful that we will be able to bring them back to work soon," the company stated.
Canoo had already furloughed 10 employees in Texas earlier this month.
Despite the setbacks, retail sentiment for Canoo on Stocktwits was ‘bullish’ as of 12:30 pm ET.
One user speculated that the company might be headed toward a merger or buyout, potentially from a legacy automaker.
Another suggested that funding would only come if a clear path to profitability were visible.
As TechCrunch reported, Canoo has had a rough 2024, with multiple rounds of layoffs, closing its Los Angeles office, and the exit of its CTO and all founders.
The company has reportedly been kept afloat by loans from the venture firm run by its CEO, Tony Aquila.
As of September, the company reported having just $16 million in cash, cash equivalents, and restricted cash.
However, there have been some positive developments, particularly in Britain, where the company officially launched this year, received regulatory approval for pilot vehicles and secured a deal with Royal Mail (the U.K.’s largest electric fleet operator) to pilot its EVs.
Canoo’s stock has lost nearly 98% of its value this year.
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