I’ve always had a sense that to make the promise of electric vehicles (EVs) come to fruition; the industry would require a different way of thinking. That’s one reason for you to consider an investment in Canoo (NYSE:GOEV). It’s understandable if you’re just getting up to speed on Canoo. The company went public via a special purpose acquisition company (SPAC) late last year. Canoo trades under the ticker symbol GOEV stock.
Innovation is a word that gets thrown around a lot. But sometimes innovative just means different. However in the case of Canoo, the company is really doing taking an innovative approach to building an EV. That got the attention of Apple (NASDAQ:AAPL). And the company is reportedly pursuing a contract manufacturing deal with the auto parts giant Magna International (NYSE:MGA).
Not Your Mother’s Minivan
As the EV sector becomes more crowded, it’s important to have differentiation. The novel approach that Canoo takes is one reason to consider the stock. The company is entering the market with two offerings. The first is what it termed a multipurpose delivery vehicle (MPDV). Or, if you glance at the schematic, it might better be called a party bus.
This is because of the innovative design. As Luke Lango wrote, the basic precept with any traditionally fueled or electric vehicle designs is that they are meant to be…driven. That makes sense, right? Well the thing is we’re becoming a society where people want to get from point A to point B without worrying about that driving stuff.
Canoo’s vehicle is not there yet. But the “by wire” system being employed in the design is an essential part of the company’s “skateboard” platform. And down the road, it will be the key to providing the vehicles with autonomous driving capabilities.
The company is also looking to put this design to work in a last-mile delivery vehicle.
A Minimal Commitment
Another reason to consider GOEV stock is the way the company plans to sell the vehicles. In fact, the word sell is not appropriate. Canoo is offering consumers a lease with virtually no commitment. Essentially the company will have an SaaS model for electric vehicles. Consumers can pick out a vehicle and lease it for a specified period of time (minimum of 30 days). After their subscription ends, they can simply return the vehicle. There’s no long-term contract. And they can return it anytime.
Yeah, it’s kinda cool. Like Netflix (NASDAQ:NFLX) but with a car. But it’s more than that. It will afford the company with higher margins because, in theory, one vehicle will have multiple “owners” throughout its life. And that makes the company irresistible to analysts.
The Electric Vehicle Revolution is Real
The electric vehicle sector has always been an intriguing industry. But it always seemed like all the tumblers were never in place. When there was the political will, the technology was years away. In the last few years, the technology has caught up but the Trump administration had a policy of benign neglect towards the sector.
But there was a new wind blowing down Pennsylvania Avenue. That wind is blowing in an administration that has said that electric vehicles will be a key part of its agenda. This means that investors should view the sector with a little less speculation.
Buy a Little GOEV Stock Now, Buy More Later
Canoo will have no revenue for at least another year. A lot can happen between now and then so it’s not fair to say nothing can go wrong. We all know that things can go awry. And since prudence is a good virtue to have, I recommend prudence with GOEV stock. Now would be a good time to take a small position on the stock. The stock is just starting to move higher, but will likely have some volatility as the lockup period ends.
On the date of publication Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Chris Markoch is a freelance financial copywriter who has been covering the market for seven years. He has been writing for Investor Place since 2019.