My number one electric vehicle stock to buy for the long haul, Canoo (NASDAQ:GOEV), got pummeled in late March. GOEV stock sold off near-40% after the EV maker announced on its first-ever conference call as a public company some surprising changes to its team, business model and vision.

Wall Street didn’t like the changes, mostly because they result in revenue projections being revised significantly lower over the next few years. GOEV stock plunged more than 20% in response.

But the changes management announced on the call do not at all impact the company’s core value props, which are its technology, its engineering team and its IP. Instead, they are changes related to how the company plans to monetize its ultra-valuable multi-purpose-platform (MPP).

While such changes will result in less revenue in the short-term, they should also result in the more revenue and profits in the long-term. Also of the note, the management changes are mostly finance-related, and do not materially impact Canoo’s ability to improve its underlying MPP technology, which is the only thing that really matters here.

To that end, my long-term bullish stance on GOEV stock remains unchanged.

I continue to believe that Canoo has assembled a world-class engineering team that has created a transformative MPP technology which will create a new generation of new-and-improved consumer and commercial electric vehicles that maximize interior vehicle space, and are therefore, exceptionally useful when applied to family vehicles, pick-up trucks and delivery vans.

In that context of that big picture, the selloff in GOEV stock looks like a golden long-term opportunity.

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Here’s a deeper look:

GOEV Stock: A Shocking Conference Call

One look at the GOEV stock chart, and you can easily tell that Canoo’s fourth-quarter conference call went pretty poorly.

The call itself was full of shocking surprises that had analysts scratching their heads.

First, the company basically said it will scrap its engineering services business. Originally, the story at Canoo was that the company was going to provide engineering services to other auto makers to help them make EVs on top of Canoo’s MPP technology, and that this revenue would help the company subsidize operations until it developed sufficient manufacturing capacity to make tens of thousands of its own vehicles. Last year, Canoo announced an engineering services partnership with Hyundai.

But that partnership is now dead, and it looks like the reason why is because Canoo has decided to deemphasize its engineering services business in order to protect its IP. Makes sense. Back in its original projections, however, Canoo was calling for all of its revenues in 2021 and most of its revenues in 2022 to be from this now-defunct engineering services division.

In other words, Canoo’s 2021 and 2022 revenue estimates need to move significantly lower.

Second, Canoo also said they are moving away from the subscription business model for its lifestyle vehicles. Remember, a big part of the Cannoo story was that the company was trying to pioneer a new subscription business model wherein consumers could rent its vehicles on monthly subscription plans. But, due to balance sheet risks inherent to that model, management is moving away that model in favor of just selling vehicles directly to consumers.

Third, as an extension of changing its business model from engineering services and subscription sales, to vehicle B2C and B2B sales, management is pulling its original long-term model offered when the company announced its SPAC merger.

Fourth, the CFO is out — and that’s never great news when a top-level C-suite executive resigns just months after the company goes public.

Oh, and against the backdrop of all those changes, the company’s CEO wasn’t even on the conference call. Instead, the call was headed by Tony Aquila, the company’s Executive Chairman who joined in October 2020.

Breaking Down the Changes

At first glance, the aforementioned changes announced on Canoo’s conference call look like deal-breakers for GOEV stock. But they aren’t. At all.

Remember, all of the value at Canoo rests on the company’s world-class engineering team and the signature MPP technology they have collectively developed. None of the changes announced on the conference impact that value.

A switch away from engineering services protects the IP of that technology. Sure, it eliminates a revenue source. But, at the same time, it should boost Canoo’s direct-to-consumer and direct-to-business sales channels at scale, since no one else will be building vehicles on top of this MPP technology.

The subscription business model was a cool idea that, if it worked out, would’ve been nice. But it was always a long shot. And without it, Canoo will still sell tons of lifestyle vehicles, trucks, and vans. No change there. Profit margins also won’t be impacted by this change, since Canoo still plans to resell the same MPP chassis multiple times — which is where the higher margins come from anyways.

Scrapping the model out to 2025 reduces visibility. But doesn’t change the underlying technology or its ability to scale. By 2025, I actually think revenues will be higher under this new business model than the previous one, given higher volume of B2C and B2B sales.

And, finally, the finance team isn’t driving the value at Canoo. The engineering team is — and that engineering team remains fully in-tact. So long as that remains true, the future of Canoo will look bright.

What Really Happened

In my opinion, here’s what really happened at Canoo:

You have this world-class engineering team. They developed this breakthrough MPP technology. They then got a bunch of not-world-class finance and strategy folks to put together a game-plan to monetize that technology. That game-plan was half-baked, and risked the company’s IP via engineering agreements with competitors, while also putting stress on the balance sheet via subscription sales.

So, when some more experienced business people came into the business following the SPAC deal — including longtime technology business exec Tony Aquilla — they convinced the Board to make some big changes to the strategy side of the business. They’re making those big changes right now, and at the end of the day, Canoo will emerge as a company with both a great technology and a great game-plan to monetize that technology.

Long-term, then, I feel the tough changes Canoo is making today actually position the company for bigger and more durable growth.

Specifically, having full control over the IP widens Canoo’s technological moat, selling via upfront sales should actually boost cash flows and reduce down balance sheet risks, and focusing on the commercial market mostly allows Canoo to maximize the biggest advantage of its MPP technology, which is that it maximizes interior space of vehicles.

Strategically, I like these changes. I understand Wall Street’s having a tough time digesting them. Wall Street doesn’t like change. This is big change. Of course, GOEV stock is going to be weak.

But long-term investors would be wise to work through this weakness, and stay the course.

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Canoo will emerge from these changes as a stronger company, and long-term, this company will turn into a major player in both the consumer and commercial EV markets.

Bottom Line on GOEV Stock