The electric vehicle (EV) startup Canoo is making some headlines after it was revealed that CEO Tony Aquila’s private plane was operated with twice the company’s annual revenue. Concerns over the company’s financial sustainability were raised by the substantial discrepancy between spending and revenue in its 2023 earnings report.
Canoo recorded overall net losses of $302.6 million in 2023, although its revenue of $886,000 in 2023 significantly rose from $0 in 2022. The business made considerable headway in its operations as seen by the 22 cars it delivered to organizations including NASA and the state of Oklahoma. The difference between earnings and losses is still quite large, though.
Canoo’s expense on the CEO’s private jet was one of the most startling disclosures in the financial report. Under an arrangement struck in November 2020, Canoo reimburses Aquila Family Ventures, controlled by the CEO, for the use of an aircraft. The amount of money the business spent on this reimbursement in 2023 was $1.7 million, which is twice as much as it made that year. Canoo also paid Aquila Family Ventures for shared services support in its corporate office location, so this spending fits into a larger pattern.
A few people have expressed concern over the CEO’s extravagant use of his own jet, particularly in light of the company’s financial difficulties. Canoo has been spending a lot of money trying to increase the number of commercial electric vehicles it produces. The company’s hazardous financial state was indicated by a “going concern” warning included in the regulatory filing for 2023.
Even with these difficulties, Canoo is positive about its future. If the company’s revenue projections of $50 million to $100 million come true in 2024, it might greatly enhance its financial outlook. However, to secure its long-term survival in the cutthroat EV industry, the business would need to adjust its spending patterns and concentrate on income creation.