Canoo secures second Saudi vehicle order

US EV start-up Canoo has will supply two of its EV models to tourism project Red Sea Global, in the automaker's second supply deal to Saudi Arabia announced this month.

"Red Sea Global will pilot Canoo’s lifestyle vehicle (LV), lifestyle delivery vehicle (LDV) 190, and the Bulldog pickup truck. The Canoo vehicles will be piloted for travel between Red Sea Global’s international airport, its various resorts, facilities, and excursions," Canoo says.

Canoo has also sealed an order of its electric delivery vehicles to a Saudi Arabian paint manufacturer called Jazeera Paints.

Jazeera Paints will initially purchase 20 of Canoo's electric vehicles into its fleet in 2024, with the option to expand up to 180 additional vehicles, the OEM says. Saudi Arabia has made a series of investments into EVs, most prominently in the country's Public Investment Fund taking a 60pc stake in US EV manufacturer Lucid.

The US commercial vehicle-focused challenger produced just 22 vehicles across 2023, 17 of which were made in Q4. But the firm recently purchased "a substantial portion" of the manufacturing equipment previously owned by bankrupt UK commercial EV maker Arrival to be used at the firm's Oklahoma factory, which has also been designated a Free Trade Zone, which allows the company to sell vehicles internationally free of tariffs.

Canoo has is planning to install 20,000 annual unit capacity to meet its large order book worth over $3bn. The company's biggest customers are Kingbee, a Utah-headquartered van fleet solutions provider, and retail giant Walmart, as well as various government bodies.

However, in the early stages of its revenue generation, and despite a run of orders over the past few months, Canoo's debt and cash levels are cause for concern for some analysts.

"Canoo has generated positive news flow with EV deals and asset acquisitions, but the company lacks the cash on hand to reward shareholders," says Mark Fox of investment firm Stone Fox Capital.