GOEV - Earnings call transcript Q1 2021

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Operator

Hello and welcome to the Canoo, Inc.

First Quarter 2021 Earnings Call and Webcast. At this time all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. It’s now my pleasure to turn the call over to Kamal Hamid, Vice President, Investor Relations. ahead. go Please

Kamal Hamid

first is Canoo’s Canoo. earnings call. conference Welcome Hamid, quarter VP name Kamal at of My to XXXX Investor Relations

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Tony Aquila

At to earnings bring how And Thanks, a has mission been our expand to our the Kamal. Canoo is EVs address the product progressed reported we since due weeks seven shows have last market. use of of portfolio to cases only and range everyone. transaction. this total timing addressable wide stock to It we video our

are a manufacturing, normal on these Reporting with will to are into technology, towards capital we and on and areas date the business. updates. aspects our we key how following on any areas, human on In progress our our other you operations, product pipeline, Now XXXX, keep sales this we of material and moving report report. production, up and will order business quarterly cadence progressing

in I regulatory SPACs today. There update, remain early-stage companies share business capital of would evolving By many will nature, to environment. an market, market the the access for dynamic have private that backed mature normally are companies democratized in view into going the early-stage EV the they view. these as emerging public SPAC by Before been capital. growth have happening and wanted to including our things

for to company. strategy We better transitioned position as public our success us have a

headwinds, over performed of with the in diligence conducted EV have sector EV SPACs some-near strategy. both And due SEC’s dollars EV billions interest specific leadership ICE with we are OEMs facing and past and SPACs corrected frankly warrants in including impacting the investor now months. has determination supply EV significant and invested. deep seen number interest being are But treated, company constraints our of chain issues. new term course The on the Our line how

many leadership experienced Canoo market Our at has navigated cycles.

focused are long-term positioned today on We a business be building that success. for will

through business let Now some updates. me you walk our of

fast large, a addressable have We profitable and market. growing

of total Europe be new The vehicle addressable the X.X takes XXXX. Today, addressable market call sales to our from is grow projected XXXX. and Our in projected the both for XXXX vehicles in for to model XX% markets, to million vehicle into is annually as market by U.S. aftermarket. account the vehicles business we new TAM and sales by products new

estimated XX% addition margin intend in sales, gross $XXX maintenance margin four, XX XX% over-the-air customization margin. And XX% services across on owners capitalize an Canoo in we the life after sales and accessories transactions ways, new to multiple opportunity with the beyond. monetizable vehicle $XXX two, in and XX% focusing gross capture XX% and to by and in one, over In billion with three service have to full on within cycle, TAM $XX repair a owner to finally, to and will million billion approximate three,

all and open call lifestyle pickup pre-orders or vehicle, MPDV for the today, the are our our As delivery vehicles, truck. vehicle, we now our on multi-purpose we as announced website

four, website be Premium to pre-ordered All lifestyle vehicle our free these be your in product with will first market Adventure. our to on can will reserve a vehicles come Delivery, refundable Base, one, $XXX deposit. today. feel for The trims, and three, vehicle of and Please two,

our our before price refining team, a and starting hope represents in Further, of customers that $XX,XXX we the continuing and the offering we customer be This in are to more approximately to trims mix XX% vehicle. mix. less analysis are tune than expanding a with and administration’s lifestyle We’re to our to on customers incentive details fine vehicle associated tax Adventure trim and will energy volume. the These Premium program strategy revenue digital in the determine the quarters. of announced proper leasing, current we subscription clean upfitting. is provide on the and and will and is for journey programs, for to will credits which emphasis the purchases Canoo and prices Base go-to-market of of Pricing will you advantage targeting our and The optimal apply service near-future. Delivery, and take platform building upgrades the for with our allow infrastructure. before coming $XX,XXX include line to penetration a rebates EV range

coming margin on more will information in We provide mix, the and geography quarters.

validate topics as accounting tier on management reforecast model. these as of our are financial helping our Our analysis consultants and top well retained the

certainty We a opportunities, about will pipeline which provide closely we projected will managing orders be to to will and develop our how sales disciplined more tied take production approach system.

pipeline stages. We will three our report order in sales

will orders have will date. include Two that a first potential customers volume qualified. commitment The with and include

and designed XX% and power software interior struck allow examples, lease will motors. reservation by At with peak Third, approximately a creating more the XX% wire include power harmonized system space. unique to fewer which motor spring than a flatter drive comparable XX% and higher platform XX cubic towers, first parts technology, of density, higher feet us electric transverse with We reduce own and three order. Disclosing contract a EV a hardware. way and any eliminate a deposit. pipeline than on and final additional the Canoo, continuously this between misperceptions stage in will by a of non-refundable developed engineering, orders few our a our refundable accompanied vectors innovate have we binding we Give difference binding the

above other further features as function cells, enabling our and an and use margins We bi-directional a energy and as and which vehicles meet are on this battery our power charging which packaged higher the be and have capital using We believe clarifies engineering, demand We customers. on implemented will cleverly engineering enables capability, an efficiently reduces to energy we increasing competitive mobile IP. others. than in density from mid-single-digit superior private in protecting company contract our technology what proprietary resulting an our specific generates Canoo by leading into operating advantage focus and MPP plants than focus which The innovative believe return EV. commercial

undergraduates, the would benefit. accelerates to focus university and Wisconsin. and more the competitiveness University entire will continuous broaden to program, Ph.D.s, time, that create partnership we before benefits interns start the and we talent our huge is innovate of we believe EV on industry over expand ability a of and entering advancing and multi-state which enhance like will our U.S. electric technology, mutual key part As workforce, announce IP of a pipeline This critical a company to with further innovation, access for powertrain

our of launch We the post opening university COVID. with partnership have the to target

car's believe late we step, testing, processes. the our and customers insight an of the on dissatisfaction, production. we Through validate we multiple of satisfaction this production better Phase production climates which customer allowed accelerating important log final like design of $XXX and service, Rebecca reduce process. partner customer we like our likelihood of the improve the our validation phase produce the cost We leadership data. SOP important To deeply faculty to influence XXX with companies thanks of remain us that Phase American phase, Tommy which special the will and innovator, this manufacturing than would is track production in is by vehicle which phase log ecosystem, using Wisconsin hundreds in In and a vehicles further her validates system. give define total why Now investing thousands also more I to vehicles and testing phase, does complete repair and our beta additional can million Canoo. selection of say, analyze With By parts our XXXX. has as environments, amount we recalls to and Blank SOP. standards millions dollars. X ownership. can starting the we highest separate We partnership President will with clear, our be processes phase hundreds I in for and want standards, and beta University iterate huge of gamma in Governor, gamma. manufacturing before safety R&D gamma on have highest and investing gamma, XXX Chancellor that the Thompson, of in with and software quality cost thank this complete, real X But ensure methods. and are miles. produce In now are and of and to meet and encouraging design tools This to to and invested is to world we maintenance great visionary of providing not university across a Former the Or reduce to

on phase do not at to quarterly gamma this on update COVID-XX an a basis. provide delays will due We time. currently expect We

However, exist impacted. certain if may the that market expected conditions to affect be and today timing our continue

produce XX,XXX current to capacity Our in XXX units beyond XXXX. in to additional units In is X,XXX XXXX is some and XXXX, production plan. there our plan

taking However, our projections. a we to conservative are approach

We quarters. coming will the update this in continue to

our positioned to an we geographic globally the expansion we'll market our two manufacturing, two have manufacturers. speed. and Phase market. To Now meet late vehicle third-party lifestyle trends our our to update on phases four timeline manufacturing, by established XXXX, to for X, This of deliver high-quality SOP enhances selection of down our accelerated contract contract of ability

to result in approximately of expected to Our teams evaluate potential million. carefully $XXX partners savings work is

the which selection, next we We plan to final will quarter. in announce now to move

and manufacturing In creating chain with for manufacturing XXX opportunity in in addition, and sites an in competitiveness for for American the advanced reducing manufacturing. in administration's facility. more our QX potential the delivery the XX% of It for bomb Phase our clean Phase across To and jobs. our evaluated vision strengthens date, subsidies, energy our built end investing local form and we and we of current access as XXXX, than wholly-owned volume Phase reduces sourced beyond. supply This be to federal have X, while costs. X. provides global our high us capital North transportation America the have taxes X to American state Aligns for will and costs U.S. non-diluted American more of import

advanced of governors our on York governors forward to focused plan of the We Our New from on position senators and and each to as securing and personally quarter in met site four, states U.S. team local reception one thinking Michigan focused such a clean infrastructure. and manufacturing. is state next We with board packages four energy infrastructure. by recent energy leaders. states. down part I the inspired the At announced incentive multiple world-class new on and advisers been for this other update and states who search see of and the EV sustainable these trend Recently by have and end in are narrowed leading have our enhancing technology and adoption meeting, have the clean the two sites officially continuing to of call. eight we select you as

QX of workforce hiring end our driven the versus by XXX XX% XXXX engineers. As by of of has QX, grown to

involved. consists STE sensitive Our We workforce where and on work that short information of contractors. duration XX require XXX staffing is with projects and not contractors competitively flexible

on of to entirely workforce almost And top this of engineers. made up our to continue is talent drive Given about R&D, XX% focus which attract our innovation innovation. to we dedicated is

will fleet and software coming we filled go-to-market, sales have addition, profiling have in built roles we the out In and Team Executive Management which in key be the development, quarters. recently substantially our

hub design engineering are our of addition our in base. In employee diversifying our California, we to and footprint

or be exploring I costs diversification and electric rapid powertrain workforce and The is multiple region. more and focused We also for will capital corporate of go-to-market. earlier, our is expansion. capital adding to work able certain optimize hubs zones. research focus result Geographic Wisconsin, and and workforce international that on a specific talent us in attract prototyping, time will further that human drives mentioned to our to in return higher costing offices is diverse have enable which stronger, We're purchasing on added, Texas, as and focused we'll on on functions, innovation. Michigan

updates but As to I fact inquiry. questions committed attention that for a a are Unfortunately has recently unable notice as mentioned any are from reasons, on We obvious received the Canoo. They investigation an they a earlier, this, of appropriate. the lot providing to SPAC. as take process finding we SEC regarding there timely conducting of are we characterize

million to in our PPP save to Hennessy prior with Canoo’s essential granted We loan are announce would of risk. the merger We been that able and Corp. have also IV, IR we XXXX, July you Acquisition first date of pleased like capital the $X.X that Day. the repay to was Capital for to public

event like over Renato in-person to we be will to Ramesh, June will that first webcasts I our call in Before This the Day turn share Texas. really IR and be are attendance and on I would XX hosting Dallas, limited.

members provide Renato timing canooirday.com. me and and from will volumes, updates turn milestones. the hear important on You Ramesh. several management will is to projected over of our open Registration other senior we now and let at With call that,

Renato Giger

Thank you, Tony.

liability. $X.X value results quarter to Adjusted of for minus compared period. research quarter to was earnout million $X.X fair million year expense compared SG&A value and in prior the excluding compared $XX.X of in and period, compared warrants expense year loss earnout in the million a in for placement SG&A the change prior was and shares change year the related was $XX.X to period, compensation, included quarter million of first prior net $XX.X loss the Our was remeasurement the non-cash million. GAAP the to loss stock-based expense quarter stock-based million as period. million net first $XX.X GAAP XXXX value GAAP a follows: million in compensation, $XX.X the was $X.X quarter private XXXX research fair million. the quarter of excluding $XX.X on liability are on $XX year the million net $XX.X million million in for $XX.X shares development fair million for prior development expense of a million to $XX Ramesh? the of the of contingent periodic our the liability $XX.X gain loss was minus EBITDA of

Ramesh Murthy

Thank you, Renato.

Cash sheet to quarter for we ended million and XXXX Turning million Capital compared with in expenditures the with months balance XX, with for of $X.X prior cash $XXX.X XX, compared million equivalents. to March cash ended flow, prior ended the the year the operations period. the cash in $XX.X period. in XXXX, $XX.X months and three million three was the $XX.X March used million

XXXX, depreciation the $XX stock-based for and $XX $XX to million capital guidance our approximately quarter for $XX second to anticipate expenses, to expenditures. for approximately operating million following the Turning million excluding million of and we expenditures, compensation

open up I'll Tony remarks. we closing for the the turn call call Before Q&A, to for over

Tony Aquila

Ramesh. you, Thank

in ahead our manufacturing facilities we future As expect and accomplishments partners. time. supply of of now the location to close chain like whole a work short for their look to Q&A. open and We the a for XXXX, balance Operator? hard identifying we by and for and our call thanking contract including to against key partner, several their all the to many such advisors initiatives, team execute our a Canoo I'd manufacturing like for would own consultants announcing

Operator

Our today Murphy you. Instructions] coming from first of question Thank Bank from John is [Operator America.

Your line is live. now

John Murphy

And mean, to got Tony. and are you. I info. thanks on afternoon, market in segmentations industry very Good some things other your the comments for all about, of point. agree the with I

you. as about, the about, more lot and seems volumes some similar you're online so, of incumbent to share funding might shoot timelines clearly, so get have nimbly side think the faster, a So, like But you're on accelerate based a it the companies yourselves like early and that I in what thought to things is public stage market of wrong wanted the and there one be it. here. take incumbents we going you're perspective of debatable – to on out when you're understanding allows ahead the of and SPAC that forming you're doing times this saying lot about talking the talking that is, gap at SPAC and things is get Is maybe in in you a that thing competition forum, your and had one these of I that initially,

could slower think going maybe how and competitive could to move comment you you faster is that they're move So going or or shape you the over just think if time. on up maybe to you environment

Tony Aquila

Yes.

So competitive of pro – I'm point equity similar We and public to see doing venture so our innovation. further participate for in equity that's private John things. on kind think to a democratization discuss, good view my I of the countries capital,

and taken traditional So of curve. know, super a it What absolutely impact. companies innovation than as growth called there's bit before do different in IPO from company think involved another little accelerates public different positive it's a public the is have offerings having a perspective, is And it emerging SPAC does my though, I they're and kind standards. been they you

So the called public point to is the it's stuff this public front So right? of that fact to making in some the being in the I was that was some And has of that's evolving UGC, get used why that of view. there.

we our outperform side One, conservative. be what our more to company public underperform. dramatically company from moved over strong return is we However, is, globally better we expand it's than long-term we a have much It's that of long, being really can done build its capital to investing and style, experience, which to owners all that of a great game, want vehicle. and can to the

In the capital goes return vehicle changes fact, up on hands. as the

think to the we been get only But convinced too some participate fact So us. some point will use that like will grateful maybe be And optimistic big and them they I better, we're continue but learning I'm this that to to world are very styles people how in is fact. my able the for supporters. is for we've

And road. the XXXX, triggers frame, think conservative. really a you in But some about right? as rubber really the us is the think it's big in meets That's electric And industry too this long-term may it, when XXXX if the game. of

this things made more It a we platform, the we we we that if we've our how And our layers, looks about believe capital of assembled. less the conservative in chips so much than will really really that anybody invested And say rolling real somebody pretty at now always own forward. will point, we the how a IP, fact our focus stance we've we are and use if some looks we're security would go-to-market, take that anyone, money but capability that human be to headcounts, out, we investments on contender. going excited the

John Murphy

to X,XXX, on on how turn critical that But critical think capital it's hundreds about critical making you really stuff. And folks, need, about that? you do talk that have milestone? all measure. to counts. up lot the of How that testimonials not think that capital right and and that mean, extent the head that mass a that. not the As of you side a reach employees, when the right companies human human you as you X,XXX, of talent about vehicles is headcount it's I you're as on where mass just you can because that sort key of be and your driven do It's could on And do going Is number corner you of that thousands think and engineers. some you're against X,XXX, miles

mean, how necessarily human that corner level you capital about really turn it's I at the things but and start So changing. apples-to-apples, do you which not think

Tony Aquila

Yes.

technologically So look, in out and from with is platform derivatives today primary product output a think totally is the keep in get line. of able exponential I to when We capable and technology environment, to focused technology-focused and of of it can you engineer a your do entrepreneurial you adaptations multiple that use take mind own an personnel.

less parts to get less In amidst design, addition as is that, XX% well. plus to parts you got you've XX% what

what again, so speed. because And why have that, done. next Why, really refer of excited steering that that time. day an things to IR we've you earlier, point the column, back will having out in about all come that's I none looks And lot a no I made where at month. And you up pick have of somebody we're those you

X,XXX. for the which on targeting depth. that on today can that's But what XXX see So call of And we've that's announced. a we're real mass, what product of us, the the really it based And to we've people real curve, is, opinion, shorter end now in and in for where is kind XXXX. the range critical announced my through

our Now today. org we'll And Dip] just that's pipeline ours. that. [Audio opened updating huge got it We reaction be

We our capacity projection. in have additional

producers well give of reach geographic administration very third-party focused which the aligns bringing global this of initiative can the focused, with We’re advanced that us on partnership and manufacturing world-class side on manufacturing we’re EV to is head Yes. over the that But U.S. count Will now, based right of product we’re rise get on our XXX, FTEs range on a everything focused X,XXX to time? into roadmap.

John Murphy

to then the need. just mean, seems that lastly, you’re And time, to over laying and be costs to think continue that get about Okay. it something really potential machine available low capital hopefully, over cadence capital running? like is raises you the time? incremental roadmap And is do of and that out, you open of that this something how sort maybe I relatively think you going that stay

Tony Aquila

Yes.

like one look, government now is acting they’re our the energy good is where others of stimulating obviously things, Chinese the and technology. government happened that’s So clean

non-dilutive We’ve access to we and deeply capital that accelerate help us allows that into capital. seen how dived things. So can us have really

factored projections, any I’ve approach. of into billions you of our we again, of billions course, and for of various me, raised But that Of instruments. haven’t conservative those know that dollars so

product and roadmap. cash flow Tesla’s and back appropriately in kind look As we of journey at and very you and journey, of to cash will our manage go we ebb will pace our it the

would see capital now, ahead. conservative raising trend, be we positive then a more Tesla running more event the For model

of and the where be to this course, capital evolution industry and – milestones. punch is so important. we out And got will And

So on that appropriate from opening it’s telling up message our at non-diluted we’ll capital. building times with and now we’re be our the the everything the again, market’s possible. and Street we’ll as relationship now raising out But the be road

John Murphy

you much. Thank Great. very

the XXth. to forward Looking XXth – June

Tony Aquila

Thanks, John.

Operator

coming Instructions] from next & RF Our Lafferty Perez [Operator Jaime Company. from question is

now live. Your is line

Jaime Perez

How Thanks on day. everybody? the update for the you doing are Good manufacturing.

of the Phase X, it time the where next focusing over years, to going ordering house. long started Because the manufacture field like looks Have of Sort couple crotch. manufacturing equipment? of be comes on in pretty you lead is

So could you any give that? on us update

Tony Aquila

of ordered. we’re are ordering, tooling we been many the entering into and already LV, the and because so Yes, in – gamma equipment has we’re so it

a on on those items. got grip we’ve very So and stamping large other good the all items

yes. So,

on derivatives can a all, of get utility scale. of we because that NPP, put lot the obviously Second high we get we

it set fashion we’re So us on can focused of And up out of understanding industry coming in those deeply. to of assembly ladder demand. lines we our very and meet course, this a that for

So we are feeling good about it.

we batch ordered stuff. but which impacted approach while It’s course, took could leveraging part And we flip a and Of is and why get XX% can haven’t be discussed the us quick, sourced off of and gets already get at the else’s the as It and approximately facilities second then and/or up in move it that’s one, parts, that’s volume expansion. geographic going ours to expertise, ground. the effects, pandemic two-pronged demand the we by day. and other much earnings perfected so it’s we’ve somebody up every we high to relationship make it more we on focused site

design is in focus. back inside an this out in So, look again, this with outside isn’t outside I to an an come design,

think of things And those customer will out on become as compared so also the piece, journey we competitive focus that I multiple roll to landscape. we’re the owners, and an focusing area appreciation

equipment comment the comments the segregation would Phase stamping – the will piece that on for in report your X the X in and fact, we’ll facility. just when be more we my so, get Phase wholly-owned detail manufacturing in towards And based of some on by

Jaime Perez

of issue I to hear on question. the then transparency my have. that other in pre-orders. All to compared and you. more that’s thank comment. the because come And for companies a Thanks But to I is glad it’s I pre-orders questions. a of Yeah, reserves is next just bold be right, just step a all one transparency more also the in mean, pretty transparent more you’ve taken

Tony Aquila

Jamie, and And order. someone’s we understand sure I that. difference want very focused appreciate definitely people obviously, and that the because to someone’s are clarity we on between make reservation transparency

Operator

session. question-and-answer like floor our back you. end this to point. Thank at of We’ve I’d to over Kamal reached turn the the

Kamal Hamid

of joining you you our you to for forward so a seeing Day hybrid will us. you IR be Those lot it way, to in-person a Thank everybody we’d Look can’t have attend XXth. attend who love of event. on June on virtual

you back out sure you. So with questions to get Thank if please and reach have, we’ll be you. any

Operator

Thank teleconference today’s webcast. you. and conclude does That

and You participation have today. may your time your you thank for We day. lines wonderful disconnect at this a

Canoo (GOEV) 18 May 212021 Q1 Earnings call transcript