The investment does sound absolutely reasonable at this point.
This happens in literally every other market and industry. hell, just look at PCs and laptops.
Like why can't a Canoo or Rivian license a base EV platform and come up with their own chassis design, infotainment system, and other little things to differentiate themselves?
why does it HAVE to be all or nothing?
This has recently happened to a well known EV company relying on just the electrical platform from a well known and highly respected auto maker that they have a good relationship with. It means they’ve had to go looking at other platforms (again, just the electrical platform) and has put the whole company at risk.
When you talk about a base platform I assume you are meaning an entire drive train? Most pieces of a car are going to be produced elsewhere and then assembled. Canoo isn’t making their own batteries or motors. Those come from battery and motor manufacturers. Canoo or a similar company might even buy structural battery pack built to spec by CATL.
Tesla's original was a fork of a Lotus. They got the whole chassis/etc from Lotus, dropped in their own drive train and other stuff. Other reply mentioned paccar.
Idk why it doesn't happen more often. I suspect most manufacturers aren't willing to license like that.
Alpine makes forks of BMWs.
Braubas makes forks of Mercedes.
RUF makes forks of Porsche.
The other example is when 2+ large manufacturers work together to cost share a platform.
Examples:
- BMW Z4 / Toyota Supra
- Subaru BRZ / Toyota GT86
- Mitsubishi 3000GT / Dodge Stealth
The NUMMI car factory in Fremont, CA was jointly owned by GM and Toyota before Tesla bought it. For a while, it made the Toyota Voltz / Pontiac Vibe.
I think people get the impression from the wording that the “platform available off the shelf” means the consuming manufacturer can just grab some units and modify them, but in practice, there is a massive contractual negotiation. And since car manufacturers are heavily regulated, it makes sense to cost share both the manufacturing and the standards / crash testing.
The ICE car market is a massive market, which taking a part of required massive long term investment, and would result in you being relegated to just some minor side note.
Even Toyota one of the longest biggest players is still seen as kinda "new" compared to BMW and VW, let alone hyundai which is basically a massive state backed effort.
Now consider, all of that 100+ year history becoming completely irrelevant. An opportunity to time travel back 100 years and try to become the BMW of the future. I think this is what is exciting people.
when is the last time an entrenched trillion dollar industry with hardly any shakeups in decades suddenly had the ability for anyone to enter and say their biggest advantage is that they are new?
I am not saying I agree with it, I think knowing how to make a luxury car is a skill... But I don't think the goal of these CEOs and investors is to make a good car. Their goal is to make a 100+ year global legacy like BMW. If they could do that without making the car I am sure they would.
So now the ICEs are scrambling to catch up, and are doing so, but lots of money is flowing around hoping to be the next Tesla.
And their sales were still dwarfed by legacy manufacturers, who then started paying attention and practically all of them have at least one EV model out there, often with new platforms/models being in the works.
Meanwhile the legacy companies will keep moving slowly along and produce vehicles. Some will die, some will merge, some will have wild successes.
But it's much different than Google et al because cars actually cost about as much to make and sell as they do to buy.
EV cars seem to be the go-between for ICE and the real answer for Green.
The analogy in the PC world would not be "license a design from an ODM like Compal or Quanta", it'd be "license a design from Dell or Lenovo".
That in itself suggests a potential market: perhaps there's room for an ODM in the automotive space?
So why wouldn't Ford or GM be cool with letting a smaller label do this and testing the market?
Kind of. Renault's small sized EVs share parts of the platform as some ICE models (e.g. Clio/Renault 5 E-Tech) which allows them to reduce costs of the EV model. Considering their target audience and market segment (small city-focused EV with city-scale range) the tradeoff is perfectly acceptable.
> and there is no EV base platform for sale/license
How do you know this? Renault for instance are in a pretty specific spot, market wise, and they were trying to merge with Fiat-Chrysler before the latter ended up with PSA (Peugeot, Citroen, Opel) in Stellantis. They have some EV tech, especially on the cheap city-focused side (Dacia Spring, Renault Zoe, Renault 5 E-tech), and would probably be open to collaborating / sharing risks. This is purely conjecture of course.
Also, Subaru managed to license Toyota's EV tech.
That's sort of what Tesla did with the Roadster. It was a Lotus that they put an electric motor into.
There are some examples where car makers (both EV and ICE) will sell components to competitors but in general this is pretty rare. Most companies want to control key aspects of their supply chain.
Rivian did use motors from Bosch but is now in the process of using their own internally designed motors. This allows them to build exactly what they need and avoid relying on Bosch for a key component of their vehicles.
Light duty truck and van builders e.g. Ford and GM do the same thing but mostly for companies building RVs rather than commercial equipment.
I imagine anyone willing to license one at the moment only has a crappy one to sell you or it is some Chinese EV, which creates political problems.
You gain margin by controlling the supply line. Otherwise you should just be a subsidiary of one the big ones you mentioned.
"It's just smart business!"
"People are jealous because they didn't think of this!"
"They're only coming after him because he's rich!"
"You would do this too if you were him!"
Not defending this guy but I'd say the opposite happens. When you are rich/famous you are looked at with a magnifying glass. Nothing illegal is happening here, but it doesn't "look good".
Obviously, too late for canoo, but if you're running a startup you can learn from his mistakes.
Honestly at this point the reputational damage is enough, that the CEO should probably resign, if for no other reason to boost market confidence in the company and raise the value of his own shares.
> Under a deal reached in November 2020, Canoo reimburses Aquila Family Ventures, an entity owned by the CEO, for use of an aircraft. In 2023, Canoo spent $1.7 million on this reimbursement — that’s double the amount of revenue it generated. Canoo paid Aquila Family Ventures $1.3 million in 2022 and $1.8 million in 2021 for use of the aircraft.
> Separately, Canoo also paid Aquila Family Ventures $1.7 million in 2023, $1.1 million in 2022 and $500,000 in 2021 for shared services support in its Justin, Texas, corporate office facility, according to regulatory filings.
sound familiar?
> The 11-story office building at 88 University Place was leased to WeWork and co-owned by Neumann, the company's co-founder and CEO. It was one of many buildings that WeWork leased from Neumann. Critics called the leases a conflict of interest for WeWork and an example of self-dealing by its charismatic leader.
He's not the only shareholder. I am not sure the others appreciate paying for the CEO's lavish lifestyle when his company is on the brink of failure, even though the CEO is also in the red. And as you say, if he really wants to travel private, he can always use his own plane and not charge anything for it. The other shareholders are basically bankrolling his plane.
It's one think for Zuck or Tim Cook to claim that flying commercial would be dangerous and a waste of time, but the way that attitude has filtered down to very small companies is astounding (especially given the outsized negative impact private jet travel has on the rest of us).
Any reasonable board for a public company that size and a CEO that unrecognizable should at most reimburse first class fare and if the CEO wants to fly private, the delta can come from personal funds.
The guy is already ultra-rich...he might as well pay for those flights himself to show solidarity with shareholders. But it's up to Canoo shareholders to decide that, not me.
Every common shareholder is an equal, you don't get to launder jet travel the way he's doing - that's securities fraud.
If a CEO is intentionally creating a situation to make a company unprofitable and paying it back by buying shares, that is 100% securities fraud and I'm stunned anyone disagreed with that assertion.
I'm not saying the company is committing securities fraud, I am saying that if the company created a scheme as described by the commentor I was replying to, then that would be securities fraud.
The politicians play us with "eat the rich" and "fair share". Meanwhile they increase taxes on 400k in HCOL areas making it painful to succeed.
Why isn't the slogan "stop the loopholes" (The one in this thread)? Because politicians play us against each other instead of fixing laws they benefit from.
https://www.repairerdrivennews.com/wp-content/uploads/2019/0...
> Aquila Commits Misappropriation Of Solera Assets And Resources
> After execution of the Separation Agreement and Omnibus Agreement, Solera confirmed that prior to his separation from the Company, Aquila had misappropriated Solera’s resources and money by fraudulently claiming that certain flight and hotel expenses were for Solera business, when in fact, Aquila incurred these expenses solely on personal, non-Solera business—including fundraising for his intended new investment venture.
> Specifically, Aquila used a private jet chartered by Solera (Gulfstream IV- SP-N910AF) solely for Aquila’s personal business, but nevertheless charged the flights to Solera, between November 2018 and May 2019—i.e., when Aquila was still Solera’s President and CEO. For example, Aquila had Solera pay over $700,000 for 45.8 hours of flight time for Aquila’s trips to, among other places, Austria, Switzerland, Germany, Bulgaria, Qatar, Kuwait, and France, as well as thousands of dollars for certain hotel expenses associated with certain of these trips. These trips were not for Solera business. Aquila traveled for personal purposes, including in connection with his position as the Chairman of the Board of Sportradar and to fundraise for his new “Founders Select” venture.
> Solera is continuing to investigate Aquila’s pre-separation activities with respect to any further instances of fraud, theft, misappropriation, or other actions of Aquila giving rise to claims that are not released under the Separation Agreement.
I even got affected by that at a restaurant I worked at; they fed us and we got a small "virtual" payment that would show up on our taxes for that meal.
It’s pretty unreal when you think about it that our culture has not small cadres of credentialed, professional liars for hire. Not just for CEOs either, think about the fake service pets for another example.
Is this what the kids call late stage capitalism?
Canoo is one of a few EV companies that on paper should make it. They have an order book that takes them to profitability. They have alpha vehicles that work (aka the product is not science fiction). Since they're selling these primarily as fleet vehicles, it's pretty valid to believe that the typical consumer EV concerns (range anxiety, nonfunctional/overbooked chargers, I live in an apartment, etc) should apply, their customers have the capital to spend, and can even easily calculate depreciation and expected benefit over existing fleet inventory.
100% of the risk in the company is manufacturing risk + not fucking up the finances e.g. by going too far into debt where the product payout doesn't make sense. That's a pretty nice place to be for being an EV company in the market now.
It seems like the mainstream American EV manufacturers are very blinkered-- bigger, heavier, longer range, more luxury. Those products might appeal to buyers in the US, Canada, maybe Australia, but for the rest of the world, you're going to have to compete with manufacturers like BYD.
I could see the Canoo product selling in a lot of markets that you'd never sell a Lucid Air or Rivian R1T in. Once they've got a stable base on fleet orders, I could see them acquiring a quirky street cred among consumers-- sort of like Volkswagens of the '60s and '70s.
You're probably right that it's more reasonable for flying overseas. But for local travel, limitations on timing, connections, and airports served turn into a big waste of time. It's an analysis that has to be made about the value of the CEO or whoever's time, but it's not black and white, and a couple million bucks vs a few 100k for way better scheduling could easily be worth it.
'Canoo Tony Aquila Fireside' Chat https://youtu.be/AlTG8S0F_fo
It sounds like he's actually doing quite a good job as CEO. The vid from minute 3 to 7 gives much of his strategy and how he got into it.
He was a billionaire investor with a background in car parts and servicing that looked at 12 or so EV companies to invest in and figured Canoo was the one and then the board asked him to be CEO.
I guess if you are a struggling EV company looking for some billionaire to save you you may have to put up with him using a jet.
Some of that is market, but TSLA is -15% since then.
Hint - Most ultra-rich people make their money in boring industries you wouldn't even know about.
1- https://www.macrotrends.net/stocks/delisted/SLH/solera-holdi...
If you are the sole owner, that's all fine.
If there are co-owners, that shouldn't be done unless everyone gets some benefits.
I once worked for a company that went bust. It wasn't able to pay its suppliers anymore, but alway paid rent on time. Guess who owned the building.
So especially when your company is doing bad, any money you get out is money they cannot take away.
The CEO here sold his previous company for $6.5 billion [1], so he already owned the jet before starting Canoo. The company reimburses him for corporate travel on it.
But what's concerning is that Canoo is stacking big losses and living on the edge...it seems like excessive spending for a company that hasn't even made a dime of profit.
Notably, this same CEO has spent over $230 million(!) buying Canoo stock from his personal funds [2], so he is significantly in the red no matter how much he gets reimbursed for air travel.
Always dig into the details and avoid getting suckered by clickbait...
1- https://www.reuters.com/article/idUSL1N11J0PS/
2- https://www.secform4.com/insider-trading/1399053.htm