High-tech advanced mobility company Canoo has completed the acquisition of a substantial portion of the advanced manufacturing assets that were previously owned by bankrupt commercial EV startup Arrival.
The purchased assets will be collected into more than 20 containers and shipped by sea to Canoo’s manufacturing facilities in Oklahoma. As announced in January 2024, Canoo previously acquired substantially all of the new and like-new assets owned by Arrival Automotive USA, Inc. These assets were transported from Arrival’s North Carolina facility and received at Canoo’s Oklahoma facility where commissioning is underway.
Canoo has the necessary manufacturing equipment to deliver 2024 production and this acquisition expands its capabilities to deliver its 2025 production at significantly lower costs. The assets purchased in this opportunistic transaction will accelerate Canoo’s transition to automated processes by shortening purchase lead times by over 40%, reducing capital expenditures by 20%, and eventually lowering unit costs. Canoo’s strategy in the near term is to improve its processes and product quality while it is producing at low volumes, allowing for simultaneous completion of supply chain harmonization and implementation of customer feedback before entering high-volume production. By prioritizing deployment of capital to its highest and best use, the company will ultimately achieve the fastest path to achieving positive unit margins.
“Our current strategy will save our shareholders tens of millions of dollars, which today, is not properly reflected in the value of our company. We remain focused on capital discipline and the smartest way to invest and create value,” said Tony Aquila, Investor, Executive Chairman, and CEO of Canoo.
The advanced manufacturing assets include equipment supporting cabin production processes such as robots, dispensing systems, advance control equipment, PLC controllers and equipment supporting general assembly capacity expansion such as advanced safety equipment, manipulators, high-tech dynamic vehicle testing equipment and other spare equipment parts. These assets enable the company to increase its general assembly and vehicle cabin build capacity and provide redundancy in the event of equipment malfunction, thereby increasing efficiency and productivity. These assets were all purchased at a discounted price of over 80 percent of the estimated value and are new and like-new assets that were carefully reviewed, inspected and selected by Canoo’s team on multiple on-site visits conducted over several months.
Canoo expects to continue to pursue opportunistic investments and the purchase of advanced manufacturing equipment as it becomes available using a disciplined approach. Canoo may also utilize its recently approved Foreign Trade Zone to facilitate the purchase.
