Electric vehicle manufacturer Canoo disappointed analysts on Monday by forecasting 2024 revenue well below expectations, as the broader slowdown in demand for battery-powered cars continues to impact both startups and major automakers.
Shares in Canoo plummeted 38% in after-hours trading, marking the eighth consecutive quarter of warnings about dwindling capital and the company's ability to sustain operations without additional funding.
The EV industry's struggles persist as high-interest rates aimed at curbing inflation dampen consumer interest in electric vehicles, which typically come with higher price tags compared to their gas-powered counterparts. This has led automakers, including market leader Tesla, to slash prices in a bid to stimulate demand.
Based in Texas, Canoo, known for supplying electric delivery vans to Walmart and crew transportation vehicles to NASA, first raised concerns about its financial viability in 2022. Since then, the company has been actively seeking capital to support its production efforts. CFO Greg Ethridge emphasized on a post-earnings call the company's commitment to accessing additional funding, stating they will only raise the capital necessary.
However, with uncertain demand and several EV startups folding, investor confidence in the sector has waned, making it increasingly challenging for companies like Canoo to secure additional funds. Fisker, facing financial strain, recently saw talks for a potential deal with a major automaker collapse, leading to concerns over its stock price and potential delisting from the New York Stock Exchange.
To address compliance issues with the Nasdaq exchange, Canoo executed a reverse stock split in March, but the move failed to alleviate concerns about its financial health.
Canoo's forecast for full-year 2024 revenue, ranging between $50 million and $100 million, fell significantly short of analysts' expectations, which were pegged at $152.5 million. The company reported a net loss of $302.6 million for the year ended Dec. 31, compared to $487.7 million a year earlier.