Canoo Enters a $30 Billion Market with Multiple Commercial Vehicle Sales in Saudi Arabia
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The agreement between Canoo Inc. and Jazeera Paints to introduce electric vehicles (EVs) into the Saudi Arabian market is a strategic move that taps into the growing demand for sustainable transportation in the Gulf Cooperation Council (GCC) region. The initial purchase of 20 EVs, with the option to expand to 200, may seem modest but it is significant as it represents Canoo's first international sale and a foray into a market with a $30 billion total addressable market (TAM).
From a market expansion perspective, this deal is an important step for Canoo, providing a foothold in a region with strong governmental initiatives promoting EV adoption, such as the Saudi Green Initiative. This could lead to increased future demand, positioning Canoo favorably against competitors. The use of the Foreign Trade Zone (FTZ) for exporting vehicles is also a financially astute move, likely to enhance Canoo's profit margins.
However, the actual impact on Canoo's bottom line will depend on the scale of uptake within the region and the ability to scale operations efficiently. While the partnership is a positive development, investors should monitor the execution of this expansion and subsequent sales performance in the KSA market for a clearer indication of its financial impact.
Canoo's entry into the Saudi Arabian market with Jazeera Paints is a strategic maneuver that leverages the region's push towards electrification. The LDV 130 and LDV 190 delivery vehicles are built on Canoo's proprietary multi-purpose platform, which includes steer-by-wire technology and a software stack that allows for end-to-end integration into Jazeera Paints' workflow. This technical integration is a key differentiator, potentially reducing operational downtime and eliminating the need for third-party upfitting.
Canoo's technology could set a new standard for fleet efficiency in the region. However, the success of this technology will be contingent on its reliability and the company's ability to provide adequate support and service in a new market. The steer-by-wire technology, while innovative, will also need to win over fleet operators who may be accustomed to traditional vehicle controls.
Investors should consider the long-term potential of Canoo's technology in international markets but remain aware of the challenges associated with entering a new market with advanced technologies that may require a period of adaptation and acceptance.
The partnership between Canoo and Jazeera Paints aligns with the Saudi Green Initiative and the Kingdom's Vision 2030, highlighting the environmental policy shift in the region towards sustainable practices. The commitment to incorporate EVs into Jazeera Paints' fleet supports the goal of having 30 percent of new car sales in the Kingdom be electric by 2030.
This move by Canoo and Jazeera Paints could encourage other companies in the region to follow suit, potentially leading to a more rapid adoption of EVs and contributing to the reduction of carbon emissions in the GCC. While the immediate environmental impact of 20 vehicles is relatively small, the symbolic value and potential for future expansion could have a broader influence on regional environmental policies and business practices.
Investors interested in environmentally conscious companies may view this as a positive step, though the actual environmental benefits will be more evident as the scale of EV adoption increases in the region.
Canoo expands internationally with an industry leader in first step accessing the KSA market and provides opportunities for future strategic investments in the region
Justin, TX and Riyadh, Saudi Arabia, April 02, 2024 (GLOBE NEWSWIRE) -- Canoo Inc. (NASDAQ: GOEV), a leading high-tech advanced mobility company, today signed a vehicle sales agreement with Jazeera Paints, a pioneering paint manufacturer in the Gulf Cooperation Council (GCC) and Middle East and North Africa (MENA). Jazeera Paints will initially purchase 20 Canoo's electric vehicles (EVs) into its fleet in 2024, with the option to expand up to 180 additional vehicles. This agreement taps into the Saudi Arabian EV market, which commands a total addressable market (TAM) of over
These vehicles will be one of Canoo’s first international sales exported to Saudi Arabia utilizing Canoo’s recently approved Foreign Trade Zone (FTZ) which contributes to lower unit cost and higher margins as announced in Canoo’s press release on March 18, 2024. In addition, these electric commercial delivery vehicles provide Canoo with a first mover advantage in the Saudi market and a competitive position in the Gulf Cooperation Council (GCC) region.
Jazeera Paints will be deploying Canoo's LDV 130 and LDV 190 delivery vehicles within its existing fleet, which operate throughout the Kingdom of Saudi Arabia and MENA and support Jazeera Paints' commitment to the Saudi Green Initiative’s imperative that 30 percent of new car sales in the Kingdom are electric by 2030.
Canoo’s delivery vehicles are built on a proprietary multi-purpose platform with steer-by-wire technology. Canoo’s software stack allows for end-to-end integration into Jazeera Paints' workflow and its custom-built shelving eliminates the need for third-party upfitting, thereby reducing downtime for operations.
"This partnership is a key milestone in our targeted geographic expansion to the KSA region with a large and important fleet that is focused on deploying sustainable technologies across the fast-growing industry it serves. I have had the pleasure of working closely with Abdullah bin Saud Al-Romaih, the CEO of Jazeera Paints, on how we can partner together to deliver on the Crown Prince’s environmental initiatives for the Kingdom’s Vision 2030,” said Tony Aquila, Investor, Executive Chairman, and CEO of Canoo.
“I am delighted to announce this agreement to purchase electric vehicles from Canoo, which symbolizes Jazeera Paints' commitment to sustainability and eco-friendly technologies and materials,” said CEO of Jazeera Paints, Abdullah bin Saud Al-Romaih. “Tony and I have been working on this partnership for over a year and are excited about the future possibilities of ways we can work together to achieve our sustainability goals.”
Looking ahead, this partnership between Canoo and Jazeera Paints represents the beginning of a transformative journey in the realm of electric mobility. Both companies anticipate this alliance will catalyze further innovation and collaboration, paving the way for a more sustainable and technologically advanced future in commercial transportation within the GCC and beyond.
About Canoo
Canoo Inc.'s (NASDAQ: GOEV) mission is to bring EVs to Everyone. The company has developed breakthrough electric vehicles that are reinventing the automotive landscape with their pioneering technologies, unique design, and business model that spans multiple owners across the full lifecycle of the vehicle. Canoo designed a modular electric platform that is purpose-built to maximize the vehicle interior space and is customizable for all owners in the vehicle lifecycle, to support a wide range of business and consumer applications. Canoo has teams in California, Texas, Oklahoma, and Michigan. For more information, visit www.canoo.com and investors.canoo.com.
About Jazeera Paints
Founded in Riyadh, Saudi Arabia in 1979, Jazeera Paints is a pioneering paint manufacturer in the Gulf Cooperation Council and the Middle East and North Africa region, with an established reputation for manufacturing and exporting high-quality and eco-friendly paints. Since the founding of the company, Jazeera Paints has successfully maintained its top-notch place as one of the most prominent companies that manufacture paints and dyes in MENA, with an annual production capacity exceeding 500,000 tons and more than 750 active showrooms inside and outside KSA.
Media Contacts
press@canoo.com
Pr@jazeerapaints.com
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