Canoo in line for incentives from the state of Oklahoma

A Canoo Lifestyles vehicle is shown, Friday, May 20, 2022 at the Canoo car manufacturing plant in Bentonville.  (NWA Democrat-Gazette/Charlie Kaijo)
A Canoo Lifestyles vehicle is shown, Friday, May 20, 2022 at the Canoo car manufacturing plant in Bentonville. (NWA Democrat-Gazette/Charlie Kaijo)

Electric vehicle maker Canoo Inc. said Tuesday it's been awarded workforce and economic development incentives from the state of Oklahoma as the company works to bring its vehicles to the marketplace in significant numbers.

Canoo, which has manufacturing operations in Oklahoma, said recently it delivered four vehicles to fleet management company Zeeba and an unspecified number of vehicles to Utah-based Kingbee Vans -- a work-ready van rental company. Canoo also has said the United States Postal Service has agreed to buy six vehicles and three vehicles have been delivered to the State of Oklahoma.

In a release Tuesday, Canoo touted an agreement with the Oklahoma Department of Commerce that allows Canoo to receive performance-based payments from the Quick Action Closing Fund and to receive workforce training support. According to Canoo, the department recently confirmed Canoo's eligibility for certain state tax credit and tax exemption programs.

According to a copy of the agreement, Canoo qualifies for a $1 million payment from the Quick Action Closing Fund when it has employed at least 100 direct workers in the state with an average annual wage of at least $60,512 on or before January 1. To qualify for a second payment 0f $2 million, Canoo must have a cumulative workforce of 350 at the same average pay rate by July 1.

In total, Canoo may receive up to $7 million in incentive from the fund if it meets a series of benchmarks to hire up 1,362 workers at the average annual wage of $60,512 over a 10-year period and sufficient additional funds are appropriated. The agreement also requires the company to pay back funds if it doesn't maintain specific hiring requirements for predetermined periods of time.

"The state is pleased to see that Canoo has met the agreed-upon initial threshold by hiring over 20% of the projected total workforce for this project," Becky Samples, a spokesperson for the Oklahoma Department of Commerce said in response to emailed questions.

Canoo did not respond to emailed questions concerning how many workers it currently employs or exactly how much money it has received from the State of Oklahoma to date. In mid January the company said it has hired more than 100 new employees in Oklahoma, primarily to staff its vehicle plant in Oklahoma City. Canoo also has a battery module plant in Pryor, Okla.

Canoo shares moved up nearly 1 cent or more than 8% to close at 11 cents a share in trading Tuesday on the Nasdaq Capital Market. Over the past year shares have traded as high as 84 cents and as low as 10 cents.

"We selected the state of Oklahoma as our manufacturing home due to the state's strong support and hardworking employees," Tony Aquila, Canoo's CEO and chairman said in a statement. "We are very proud to reach this first hiring milestone and excited to bring high paying advanced manufacturing jobs to the area. We will continue to support this movement in the state."

Canoo said previously the new hires will help it increase its manufacturing capacity to meet 18,000 orders, representing $750 million in revenue over several years. Canoo has said hiring for its Oklahoma operations should eventually create more than 1,300 jobs but Tuesday's release put the figure at 1,400.

CEO Aquila has said Canoo has an order book valued at more than $3 billion, with large scale customers that include Walmart, Kingbee and Zeeba.

Canoo has yet to post a profitable quarter or meaningful revenue and has been burning through cash as it tries to bring its vehicles to market. In November, the company reported it lost $112 million during its third quarter, with its results matching a consensus estimate by four analysts. Canoo reported a loss of $117.7 million, or 43 cents per share, for the quarter a year ago.

In September, Canoo shifted its shares to trade on the Nasdaq Capital Market after Nasdaq put it on notice six months ago that the company no longer met certain listing requirements. The move keeps Canoo's stock trading on a 24-hour, public exchange and keeps it from over-the-counter trading, but it comes with a ticking clock of its own -- Canoo shares need to trade above $1 for 10 consecutive days over the next 180 days or face delisting once again.

In November 2021 Canoo said it would move its headquarters and some production to Northwest Arkansas. That move never materialized and since then Canoo has appeared to be focused on its Oklahoma operations. The company says it has "teams" in California, Michigan, Oklahoma and Texas.

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