EV maker Canoo posts smaller-than-expected loss on lower costs

(Reuters) – Electric-vehicle maker Canoo posted a smaller-than-expected quarterly loss on Monday on lower research and development costs, sending its shares up 2% in extended trading.

The company also unveiled its new lifestyle delivery vehicle 190, that has increased payload load capacity and body length compared with the original lifestyle delivery vehicle 130.

Canoo’s loss narrowed to $70.9 million in the second quarter from $164.4 million a year earlier. On an adjusted basis, the company lost 14 cents per share, compared with estimates of a loss of 19 cents, according to Refinitiv data.

Research and development costs fell about 67% in the quarter, lowering operating expenses to $73.6 million from $173.5 million a year earlier.

Having gone public with hopes of shaking up the automobile industry, EV startups have seen their market valuations evaporate in the past few months as demand slows and funding dries up in an uncertain economy.

Canoo reiterated on Monday that it had substantial doubts about its ability to continue operations for twelve months.

It reported cash and cash equivalents of $5 million as of June 30, compared with $36.6 million at the end of December.

The company expects capital expenditure of $70 million to $100 million in the second half of 2023.

Canoo has contracts with the U.S Defense Department for supply of advanced battery packs, and Walmart and National Aeronautics and Space Administration (NASA) for supplying electric vehicles.

“We entered the revenue and income generation phase with the advancement of our contract with the Department of Defense, and we delivered vehicles to NASA, ” Canoo CEO Tony Aquila said on Monday.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Shounak Dasgupta)