EV maker Canoo's stock soars again after facility gets foreign-trade-zone OK

MW EV maker Canoo's stock soars again after facility gets foreign-trade-zone OK

By Tomi Kilgore

Commerce Department's approval will help with Canoo's path to profitability by lowering vehicle costs

Shares of Canoo Inc. soared again Monday, toward a record one-day gain, after the maker of electric trucks and delivery vans said its facility in Oklahoma City was approved as a foreign trade zone.

The FTZ approval by the U.S. Department of Commerce allows for the elimination of customs duties on exports of EVs made at the facility, and for the deferral of duties on imported parts to make EVs sold in the U.S.

The stock (GOEV) shot up 66.6% in morning trading, which would surpass the current record rally of 53.2% on July 12, 2022.

It has now more than doubled - up 147% - since closing at a record low of $1.31 on Thursday, following a disclosure that an investor surrendered outstanding warrants it owned by buy Canoo shares.

The Oklahoma City facility that received the FTZ approval currently has more than 100 employees, and is expected to have up to 1,100 employees when it's at full capacity.

Canoo said the FTZ approval will "significantly enhance profitability" for international sales, lowering vehicle costs by up to 5% on imported parts. The company said it plans to announce sales to international markets "in the near future."

For U.S. sales, the approval improves working capital by "millions of dollars" as it will defer customs, duties and tariffs related to parts imports, until the EVs are delivered to customers.

The company said it continues to seek FTZ approval for its remaining manufacturing facilities in Oklahoma.

The stock has tumbled 45.4% year to date, while the Global X Autonomous & Electric Vehicles ETF DRIV has slipped 2.6% and the S&P 500 index SPX has gained 8.2%.

-Tomi Kilgore

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March 18, 2024 10:12 ET (14:12 GMT)

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