On July 11th, which is just one week away, Canoo will be ready to plant their flag on what will be arguably one of their most important milestones reached in the history of the company.
It will mark the very first delivery of vehicles for them, ever. If that isn't a big enough reason to breakout the champagne and celebrate, then consider that the client they're delivering to is NASA.
Canoo first announced being selected to provide the Crew Transport Vehicles in April of 2022, taking everyone by surprise. The original bid solicitation, stipulated that the CTV's were to be "delivered in a final and complete form no later than June 2023". However it seems that Canoo and NASA have mutually agreed to extend the delivery date, as per usaspending.gov, the official website that provides public access to data on federal government spending. We note that as of 6/29/23 the awarded contract was modified for the third time to "EXTEND DELIVERY DATE TO 11 JUL 2023 AND INCORPORATE DATA INFORMATION (IT) SECURITY RISK ASSESSMENT"
When we reached out to NASA and asked about the CTV delivery schedule, this is what they replied with:
NASA anticipates delivery of the crew transportation vehicles by mid-July. We plan to share some imagery of them after we receive them and will certainly make the media aware of future opportunities to see them.
Pay attention to that last line, although the Artemis II launch isn't planned until late 2024, NASA will be using the Canoo CTVs to assist with marketing the Artemis program soon after taking ownership. Despite the contract award being surprising, the anticipated delivery timing has been known for well over a year. However, it appears that the market is not yet recognizing the importance of this milestone for Canoo as the company's stock price recently reached a new all-time low of $0.41 last week. We are reminded of Tony Aquila's comments from their last Earnings Release:
While some may have criticized our small NASA order, it is essential to understand the significance of our partnership with NASA. We are closely collaborating with NASA's team of scientists and engineers to optimize vehicle performance and functionality, particularly regarding interior behaviors, comfort, safety, and security. The first 8 miles of an astronaut's journey begin in a Canoo, which makes NASA a crucial partner and customer. Their investment has been invaluable, enabling us to learn and innovate as we prepare to deliver unique interior configurations based on our highly functional futuristic design.
Photos from NASA
It's usually always a bit cliché to quote Warren Buffet, but we're going to do it anyway. In a 1987 letter to Berkshire Hathaway shareholders, Buffett stated that “in the short run, the market is a voting machine but in the long run, it is a weighing machine.” It implies that the market can behave like an electoral contest in the short term, determining a company’s share price based on how popular or unpopular it appears at the time. The fact is pre-revenue electric vehicle companies relying on dilution have been VERY unpopular since the market shifted sentiment and interest rates started to rise. Even revenue generating companies such as Rivian and Lucid have had the value of their shares plummet from prior highs. In this voting machine market, it is obvious that narratives matter a lot and if a company is not profitable and losing money, then the market needs to like their "story". NASA is very likeable so hopefully Canoo can capitalize on this partnership more to sell that narrative.
Inevitably the market will turn into a weighing machine and in our opinion the equity price will eventually reflect the fundamental characteristics of Canoo's growth potential, technological strength, competitive advantages, and management quality. The "weight" of having clients and partners like NASA, Walmart, and the DOD/US Army is too substantial to ignore forever.
Authors disclosures: I am long Canoo - I own common shares, warrants and call options.