GOEV – Canoo – One Company One Story

Welcome to another story and another video in my One Company One Story series.
This time, Canoo (GOEV).

Here comes the amateur legalese.

I began investing in companies and their stocks in the late 70s, but am not a certified investment professional.

My style and history of investing is described in Dream. Invest. Live., a book I wrote by request – which came out as the Great Recession (the Second Great Depression) began. Don’t underestimate luck.

I am not investment professional. This is not financial advice. 

Canoo. I don’t know how they pronounce it, but I’m going to say it like the boat, canoe. Apologies if it is otherwise.

Canoo is yet another electric car manufacturer. Each has some way to make themselves unique. There are enough companies building EVs that simply building an electric vehicle isn’t enough. The frugal, practical engineer in me appreciates their approach that seems to target function over form. Whether it works is more important than how it looks. As someone quoted on wikipedia, Canoo makes, “pod-shaped vans it calls ‘lifestyle vehicles’ “. 

Pod-shaped may not be the design goal, but a quick look at their product line shows a tendency to being rounded-off bricks – and that’s a good thing. Bricks are very volume-efficient. Aerodynamically they may not be attractive; but in the real world, sleek silhouettes don’t always benefit as much as their test numbers can suggest. Dirt roughens the surface. A smooth shape can have disturbances at the edges of structural panels. Aerodynamics is important on the interstates between cities; but in traffic and amongst buildings is where a lot of driving happens. Fitting in, as in fitting into parking spaces and loading docks can be more important. Being electric can mean not wasting fuel while waiting to stop-and-go traffic to finally go. 

One characteristic that EVs can have in common is a basic platform. The drive train and batteries can fit into a pan, a platform, on which various chassis can be integrated. That’s harder with gas-powered vehicles that have to incorporate engines, cooling systems, fuel systems, exhaust pipes, and generally a lot of hardware that has to snake around the passenger and cargo compartment. 

Their web site profiles the platform and three vehicle configurations: something like a mini-van, something like a delivery and contractor’s truck, and something like a pick-up. I say like a pick-up because American pick-ups have grown from functional to some pumped-up form. Having owned a pickup and now having a small car, I wonder how big vehicles make sense in crowded spaces, including narrow country roads.

OK. So, they have some innovation in a growing market, and they’re aimed at a market others may pass-over. They even have orders for thousands of vehicles from firms like Walmart. What could go wrong?

They’re a startup, which always includes risk. EVs are still relatively new, which means there are unknowns to get to know. Batteries use materials that may have limited availability. They have competitors, particularly big ones like Ford. Can they establish a niche and become profitable without having to sell out?

The investment market seems uncertain about GOEV. Canoo has a lot of news and milestones on 2023’s calendar. Despite that, the stock is at $0.66 (June 16, 2023) after a spike to over $20 in late 2020. Cash burn happens. That’s the other race startups can have, can the money start coming in before too much has gone out?

I don’t know; but, I hope they survive and thrive. I’ll be watching.

The video: