Commercial electric vehicle company Canoo entered into an agreement to acquire a vehicle manufacturing facility in Oklahoma City, the company announced Wednesday along with its third-quarter earnings. The news comes a week after Canoo said it would build an EV battery module manufacturing facility in Pryor, Oklahoma.

The new facility will be dedicated to producing Canoo’s electric Lifestyle Delivery Vehicle (LDV) and Lifestyle Vehicle (LV), an electric SUV. Canoo is still working on its “megamicro factory” in Pryor, but until that comes online, this new facility will help Canoo ramp production and bring EVs to market in 2023.

Canoo CEO Tony Aquila said the company expects to start production for the LDV on November 17 and complete final certification in the first quarter of 2023. The goal is to build 15 production vehicles this year, which will go to committed order customers like NASA and Walmart.

The Oklahoma City 120+ acre facility has “production-ready infrastructure” and is “strategically located with easy access to road and rail,” according to Canoo Aquila. Canoo will adapt the facility to accommodate a full vehicle assembly line with robotics, a paint shop and upfitting center. Canoo said the facility will be powered by clean energy.

“Following these initial builds, we will then aggressively shift all our equipment and focus to our new facility during Q1 and Q2 of 2023,” Aquila said Wednesday. “As we start production, we expect the first sellable vehicle deliveries to occur in the back half of Q1 and we will ramp production in 2H 2023 to 20,000 units run rate by year end.”

Aquila said the megamicro factory in Pryor is “a bit delayed due to economic reasons,” but that when Canoo is able to shift resources there, the startup will be able to double its run rate to 40,000 units by the end of 2024.

Long term, the Oklahoma City facility announced Wednesday will focus on producing defence and specialty products, said Aquila. In April, NASA selected Canoo to provide crew transportation vehicles for the crewed Artemis lunar exploration launches, and in July, the U.S. Army selected Canoo to supply EVs for analysis and demonstration.

Canoo Q3 financials

Canoo closed out the quarter with cash and cash equivalents of $6.8 million. That’s down from last quarter’s $33.8 million, and $224.7 million from the fourth quarter of 2021. In less than a year, Canoo burned through $217.9 million, and it’s still not generating revenue.

Quarter-over-quarter, Aquila says Canoo’s cash burn is down 25% as the company continues to shift its expense mix, increasing the ratio of capital spend to operating spend.

The company’s loss from operating activities totaled $109.4 million this quarter, and its GAAP net loss and comprehensive loss hit $117.7 million.

Canoo says it has access to $200 million through an “at-the-market offering” program, as well, but access to capital isn’t the same thing as having cash on hand.

“On the financing front, we have secured an additional $30 million in a PIPE and a note to be converted to cash or stock,” said Aquila, noting the company is in the final phases of evaluating different financing options for the Oklahoma facility. 

Canoo seems to be riding promises of future revenue to get access to more financing and stay afloat.

After reporting first-quarter earnings this year, Canoo issued a growing concern warning, saying that it may not have enough funds to make it stay in business. Things improved for the company in the second quarter, in part due to its agreement with Walmart to sell 4,500 electric delivery vehicles. This not only assured future revenue for Canoo, but also gave the company another opportunity to go after additional non-dilutive and lower-cost capital financing opportunities.

Since then, Canoo has also secured binding fleet orders from Kingbee and Zeeba to purchase 9,300 and 3,000 vehicles, respectively, with the option to increase to 18,600 and 5,450 vehicles, respectively. Today, Canoo has over $2 billion in total orders in its pipeline, according to Aquila.

“The last two quarters have been very tight,” said Aquila. “The macro economic has worsened, pushing the cost of capital higher and forcing us to accelerate our maturity and manage costs efficiently to achieve our goals. We have been doing our best to manage cash, continued access to liquidity and dilution.”

Aquila said that even though Canoo’s cash situation looks dire, he believes having less access to cash has led to more competitiveness and efficiencies.

“Being able to teach the crew here how to run a business on ‘just in time’ milestone capital is a very disciplined approach as an investor, not just as the chairman and CEO,” he said “I know it is painful. But, you know, would you rather give a young company a lot of money, or would you rather give it money based on milestones?”

Canoo revised its expenditure guidance for the remainder of the year, anticipating $70 million to $90 million in operating expenses, excluding stock-based compensation, and $30 million to $50 million of capital expenditures.

“We are now on track for a 40% reduction in operating expenses for the second half of the year, which is significant improvement compared to a previously disclosed projection of 20% reduction,” said Ramesh Murthy, Canoo’s senior vice president of finance. 

Canoo’s stock, which closed at $1.17, is up 3.42% in after-hours trading.

Canoo to buy vehicle manufacturing facility in Oklahoma City by Rebecca Bellan originally published on TechCrunch

https://techcrunch.com/2022/11/09/canoo-to-buy-vehicle-manufacturing-facility-in-oklahoma-city/

Electric vehicle maker Rivian affirmed Wednesday that the company is on track to hit its annual production target of 25,000 vehicles despite unpredictable supply chain crunches and component shortages.

The startup-turned-public company remained committed to its production goal even as industry-wide challenges, supply chain snarls and macroeconomic forces have conspired this year to keep automakers from satisfying a strong consumer appetite for cars, trucks and SUVs.

Rivian reported that its third-quarter production rose 67% over the same period a year ago, for a total count of 15,000 vehicles, including the automaker’s truck, SUV and Amazon delivery vans, through September 30. During the quarter, the company produced 7,363 vehicles, boosted by the addition of a second shift at its Normal, Illinois, factory. It delivered 6,584 of them — a significant jump from the 4,467 vehicles Rivian delivered in the second quarter of the year.

Like other automakers, and especially other startups, Rivian has struggled this year, with founder and CEO RJ Scaringe forced in July to lay off 6% of its workforce, or roughly 900 employees.

For the third quarter, Rivian reported a net loss of $1.72 billion on revenue of $536 million. That compares with a net loss of $1.23 billion on revenue of $1 million the same period a year ago.

In October, Rivian was forced to recall nearly all of its vehicles ­to fix a steering defect. Meanwhile, the company is gearing up for long-term supply chain constraints it foresees in the battery supply chain. The industry’s ongoing semiconductor chip shortage is “an appetizer to the degree of the sort of supply chain constraint we’re likely to see across the battery supply chain over the next 15 years,” Scaringe said from the TechCrunch Disrupt conference stage later in the month.

However, the demand for Rivian’s vehicles remains, with more than 114,000 preorders in the U.S. and Canada as of Monday. That’s on top of Amazon’s initial order of 100,000 electric vans.

Rivian pointed to several segments where it sees potential growth, including the 2026 launch of its next-generation R2 EV platform, a partnership with Mercedes-Benz to build electric vans at scale and the hiring of former Waymo and Zoox executive James Philbin to lead Rivian’s efforts in AI and automated driving technology.

The near-term economic challenges are putting pressue on EV makers of all sizes. British electric vehicle startup Arrival, which restructured its business amid a cash crunch and pivoted to develop commercial vans for the U.S. instead of Europe, said Tuesday it doesn’t expect to earn revenue until after 2023.

Also on Tuesday, Lucid Motors reported a net loss of $530 million for the third quarter, on $195.5 million in revenue. The startup confirmed it’s on track to build between 6,000 and 7,000 of its Lucid Air luxury sedans in 2022, down from an initial target of 20,000.

Tesla nearly doubled its third-quarter income, to $3.3 billion compared with the same year-ago period, but said production remains hamstrung by supply. The record-setting $21.45 billion revenue Tesla reported for the quarter still fell below analyst expectations.

Rivian, Tesla and the others also face competition from strong legacy automakers that continue to launch electric trucks and SUVs, such as the Volvo EX90 revealed Wednesday morning, on their quest to go fully electric by the end of the decade.

Rivian upholds 2022 production targets as net loss widens by Jaclyn Trop originally published on TechCrunch

https://techcrunch.com/2022/11/09/rivian-upholds-2022-production-targets-as-net-loss-widens/

As the crypto market digests the past few days of chaos, venture capitalists see the moment as a warning, but also as an opportunity for the growth of decentralization and maturation of the larger blockchain space.

“As venture investors, we take a long-term view on the industry; despite the current market turmoil. We are actively assessing and investing in the right opportunities,” Marc Weinstein, founding partner of Mechanism Capital, said to TechCrunch. “The premise of DeFi has, if anything, been strengthened by the collapse of centralized entities from opaque counterparty relationships.”

Decentralized finance (DeFi) is often associated with trusting blockchain technology to execute services through smart contracts, while centralized finance (CeFi) usually refers to more traditional business models and involves having people manage funds and manually execute services.

Historically, the venture market doesn’t get “too offended” by what transpires in secondary markets, David Gan, general partner at OP Crypto, said to TechCrunch. Regardless, he said, the seeming death of FTX is saddening for everyone, “not just in the VC space, but across the board.”

When there are massive crashes and burns, it speaks to what we’ve been seeing over the past decade: It’s the Wild West out there, Samantha Lewis, principal at Mercury, said to TechCrunch.

“When summarizing it all, I see it as a continuation of the phase that started when winter hit and we saw Luna and all these crazy companies crash and burn like BlockFi, Celsius and now we have FTX,” Lewis said. “As an early-stage venture investor, it’s telling me the hype is now for sure gone. But that ushers in the maturation of the space that a lot of us have been craving for a really long time.”

Some crypto VCs see decentralization as the future following FTX collapse by Jacquelyn Melinek originally published on TechCrunch

https://techcrunch.com/2022/11/09/some-crypto-vcs-see-decentralization-as-the-future-following-ftx-collapse/

Elon Musk’s mercurial leadership and half-baked product plans are already creating fertile ground for confusion on Twitter.

We’ve lost count of how many times Musk has changed his mind or offered contradictory claims about what a new paid $8 verification badge would do, but after pushing the feature live, fake accounts are seizing on the chaos.

Twitter’s bought blue check marks are now available for some paying subscribers, injecting the timeline with tweets that appear to be from official accounts. And apparently Musk’s Twitter skeleton crew made no meaningful changes to the visual language of the blue check, so right now it signals that you’re either really who you say you are — @CocaCola, for instance — or you’re somebody random who just coughed up $8 and got a stamp of approval.

Now when tweets appear in Twitter’s timeline it’s impossible to visually distinguish the two categories of blue check accounts from one another. Doing so would require clicking through to examine a user’s follower count, which isn’t necessarily a reliable way to tell, or searching for whatever clues might be found in their other tweets. Clicking on the check mark itself from a profile page apparently displays different copy too, but like everything on Twitter right now, that is subject to change.

So far this has resulted in some quick attention for an account impersonating LeBron James, which announced that the basketball star was requesting a trade away from the Lakers. A few other athletes got the same treatment, including baseball pitcher Aroldis Chapman and NHL player Connor McDavid.

As we’ve reported, Musk has already changed his mind a number of times already on the scheme to get rid of bots and spam by making people pay $8 a month. But now that the feature is suddenly live, anyone can impersonate someone else for $8 a month and see their content boosted algorithmically without any vetting. (Though apparently that paid perk, like nearly all of the “new” Twitter Blue’s features beyond the blue check mark, is “coming soon.”)

All of those accounts are suspended now, but only after the tweets gained traction and caught the attention of Twitter moderators. With one half of the staff it was previously operating with, it’s impossible for Twitter to catch all of this stuff after the fact if it doesn’t have any interest in vetting at the time of payment, which Musk apparently doesn’t.

The implications for Twitter as a reliable news source and the potential for abuse here is massive. Musk held off on his haphazard plan until the day after the U.S. elections, but with many races not yet called we can definitely expect to see confusion that’s orders of magnitude more consequential than a fake basketball trade.

Misinformation potential aside, Musk’s plan also undermines the presence of celebrities — one of the things that makes Twitter interesting for the average user. If Twitter users can’t even reliably find prominent people like athletes, politicians and movie stars to follow, the platform’s value is going to fall off a cliff pretty fast, with its advertising revenue not far behind.

Fake Twitter accounts flock to blue check mark chaos by Taylor Hatmaker originally published on TechCrunch

https://techcrunch.com/2022/11/09/fake-twitter-blue-check-lebron-musk/

The label was meant to indicate that the social-media company had verified an account’s authenticity.

https://www.wsj.com/articles/twitter-launches-gray-official-label-to-verify-certain-accounts-11668008210?mod=rss_Technology