Canoo (NASDAQ:GOEV) stock is on the rise Monday after the company announced approval for its Oklahoma City facility to be a Foreign Trade Zone (FTZ).
That approval comes from the Department of Commerce and brings with it several benefits for Canoo. That includes the ability to sell its electric vehicles (EVs) overseas without customs duties. It also allows it to defer customs duties on imported parts used in EVs sold domestically.
Canoo notes that this change speeds up its plan to build EVs in America while helping improve profits. This has it expecting costs for parts imported from outside the U.S. to decrease by 5%.
When talking about domestic sales, Canoo says this FTZ designation will improve working capital by millions of dollars. It also expects additional cost savings from reduced customs, a streamlined supply chain and other enhancements.
Tony Aquila, executive chairman and CEO of Canoo, said this about the FTZ designation.
“We are proud to announce that we have achieved another important building block in our strategy by creating one of the largest Foreign Trade Zones in the State of Oklahoma. This FTZ will generate economic growth, American jobs, and have a long-term permanent financial benefit to working capital and cost of materials.”
GOEV Stock Movement Today
GOEV stock is up 68.3% as of Monday morning with some 80 million shares traded. For comparison, the company’s daily average trading volume is about 3.9 million shares.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
