Canoo Inc. (NASDAQ: GOEV) is currently experiencing a significant upsurge of 62.58% in its stock valuation, presently at $3.15, driven by a strategic business expansion endeavor. Canoo (GOEV) has declared that its Oklahoma City establishment has been granted approval by the U.S. Department of Commerce to function as a Foreign Trade Zone (FTZ).
This approval signifies a momentous achievement poised to expedite Canoo’s electric vehicle manufacturing initiative within the United States, enhancing unit profitability and facilitating a swifter journey to reaching breakeven. At present, Canoo’s Oklahoma City plant boasts a workforce exceeding 100 individuals and is slated to provide employment for as many as 1,100 well-compensated manufacturing positions at full capacity.
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The FTZ designation affords the advantage of eliminating all customs duties on vehicles destined for overseas markets and deferring customs duties on imported components utilized in vehicles intended for domestic sale.
Demonstrating its commitment to domestic sourcing, the company proudly procures over 90% of its components from within the United States and allied nations, with approximately 70% sourced from North America and the remainder from other global regions.
For international transactions, the FTZ designation promises to significantly bolster profitability by reducing vehicle costs by up to 5% on imported parts, enhancing competitiveness in global markets, a move that Canoo plans to announce imminently.
On the domestic front, FTZ status enhances operational liquidity by deferring customs duties and tariffs on imported parts until the vehicle reaches its end consumers, translating into potential savings of millions of dollars in working capital.
Additionally, Canoo anticipates further cost efficiencies and operational benefits through a simplified customs process, a streamlined supply chain, and overall improvements in site security. Canoo remains committed to securing approvals for its remaining manufacturing facilities in Oklahoma, with the Canoo FTZs anticipated to become one of the largest within the state upon approval.
Canoo’s manufacturing strategy underscores vertical integration, with a direct ownership of the supply chain, from component procurement to delivery at its manufacturing facilities, distinguishing it from competitors who opt to outsource these critical functions to third-party entities.
Canoo’s robust expansion efforts not only promise to create high-quality employment opportunities but also aim to fortify the advanced manufacturing sector in the heartland of America.
