This morning Canoo issued a Press Release announcing that they acquired a new facility within Mid-America Industrial Park(MAIP) in Pryor, OK to manufacture and put together battery modules.
This news helps connect a lot of dots together from previous Canooers.com articles. But before diving into that, we want to point out the original PR that came out this morning contained a typo stating the capacity of the facility would be 320 MWh - this was later corrected and updated by Canoo to read as 3200 MWhs, a ten fold increase. This is a VERY impactful change. We only mention this because all the news websites who just regurgitate press releases will probably all still refer to the 320 number without being updated.
This week we published an update on the upcoming TIF vote for Panasonic's Project Ocean, which if passed, will bring Panasonic to the same industrial park as Canoo. Lets focus on the following snippet from the PR: "The location has been strategically selected due to its proximity to our battery cell partner Panasonic and our future MegaMicro factory."
What is the location exactly? Its known currently as "Building 625". Built in 2020, it has 100,753 sq ft of space and is 200' x 500'. Northern Data AG, a bitcoin mining and server company had originally planned to take over this building prior to the capital markets and price of bitcoin collapsing. MAIP held a special last minute board meeting in Tulsa in September, and we speculated that it's possible Canoo had its sights set on this very building.
If the TIF passes next week and Panasonic does come to Pryor, Building 625 is almost a stones throw away from the area Panasonic will set up shop. Right next door to that will be Canoo's Mega Micro factory. Close proximity indeed! In the event the TIF doesn't pass and they don't come to Pryor, Tony's statement will still be true in a relative sense in that it is still technically "in proximity" to their Kansas and Nevada facilities.
As already mentioned above, Canoo says the facility will have a capacity of 3200 MWhs. One Megawatt hour is equal to 1000 kilowatt hours(kWh). Each Canoo Lifestyle Van is supposed to come standard with an 80 kWh battery pack. So this facility, once it has ramped to capacity production levels, will put out enough modules to sustain 40,000 vehicles. The math on what would be ((3200 * 1000) / 80)). Interestingly this aligns well with comments from Tony regarding their owned machinery. "Canoo has "80% of [their] supplier tooling [and they] have the capacity to produce over 50,000 units on an annual basis." Their last guidance, bound to be updated or at least refined next week, was a 20k run rate end of 2023 and double that again to 40,000 by the end of 2024.
This announcement also confirms that Canoo will indeed be getting a $10 per kWH rebate thanks to the passing of the Inflation Reduction Act. This mean Canoo could anticipate $800 per 80 kWh pack as a rebate and annually pocket $32M at full production!
The TIF vote is on the 8th, just one day prior to Canoo's ER. If the TIF passes - will Panasonic be ready to announce a decision immediately or will it take another 6 months for their Board of Directors to approve the plan?
For what it's worth, Panasonic's BOD did just meet and formally approve the facility in Kansas this past Monday and now just two days later, they held a groundbreaking ceremony earlier today. We'd like to believe that at this same BOD meeting, they might also have approved the MAIP facility to be announced and move forward as soon as possible, provided the TIF passes on the 8th. We eagerly await next weeks Earning Release and hope for more clarity on the issue, although we also expect to walk away with even more questions, as is tradition. We'd also love to get exact details on who the Contract Manufacture will be for the vehicles, how long their contract is expected to last and what is in store for the Bentonville building? There are online rumors that it, or at least a portion of it, is currently being sub-leased out to another company who does business with Walmart. Perhaps after production starts it will be used for upfitting and service for the Walmart fleet.
Perhaps the most important detail to their manufacturing plans, of course, is how are they going to pay for it?