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Stock of Ev Maker Canoo Soars After Facility is Approved for Foreign Trade Zone

March 18, 2024
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Canoo Inc. shares surged once again on Monday, heading towards a potential record-breaking single-day gain, following an announcement from the electric truck and delivery van manufacturer regarding the approval of its Oklahoma City facility as a foreign trade zone (FTZ).

This approval granted by the U.S. Department of Commerce enables Canoo to enjoy several benefits, including the exemption of customs duties on exports of electric vehicles (EVs) manufactured at the facility. Additionally, it allows for the deferral of duties on imported components used in the production of EVs destined for the U.S. market.

During morning trading, Canoo's stock, symbolized as GOEV, skyrocketed by an impressive 66.6%, potentially surpassing its existing record rally of 53.2% observed on July 12, 2022.

The recent surge in stock price marks a significant turnaround for Canoo, with its shares more than doubling, experiencing a staggering 147% increase since hitting a record low of $1.31 just last Thursday. This reversal followed news of an investor surrendering outstanding warrants in exchange for Canoo shares.

Presently, the Oklahoma City facility, which secured the FTZ approval, boasts a workforce of over 100 employees, with plans to expand to a capacity of up to 1,100 employees.

Canoo emphasized that the FTZ approval will have a substantial positive impact on its international sales, projecting a potential reduction of vehicle costs by up to 5% through savings on imported parts. The company also hinted at forthcoming announcements regarding sales to international markets.

Regarding domestic sales in the U.S., the FTZ approval offers significant financial benefits, including improved working capital amounting to "millions of dollars." This benefit arises from the deferral of customs duties and tariffs related to imported parts until the EVs are delivered to customers.

Furthermore, Canoo revealed its ongoing efforts to secure FTZ approval for its remaining manufacturing facilities in Oklahoma, underscoring its commitment to leveraging such advantages across its operations.

Despite the recent surge, Canoo's stock has experienced a decline of 45.4% year-to-date. In contrast, the Global X Autonomous & Electric Vehicles ETF (DRIV) has seen a modest decrease of 2.6%, while the broader S&P 500 index has recorded a gain of 8.2% over the same period.

Cathy Hills
Associate Editor
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

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