Position a rack in the middle of the oven and preheat to 350 °F. Spray two 9-inch cake pans with nonstick cooking spray and line with parchment. Set aside. In a medium bowl, sift together the flour and baking powder 2x; whisk in the shredded coconut, and set aside.
Place the avocado oil, unsalted butter, salt, and sugar in the bowl of a heavy-duty mixer fitted with the paddle attachment and beat on medium speed until creamy and fluffy, about 5 minutes—beat in the coconut extract.
Scrape down the sides and up the bottom of the bowl as needed. Beat in the egg whites until well combined, about 1 minute. Reduce the mixer speed to low. Scrape bowl and beater and add the dry ingredients, and add coconut milk and beat until just combined, about 20 seconds (do not overmix the batter!). Using a rubber spatula, fold it all by hand to ensure no lumps at the bottom of the bowl.
Pour batter into prepared pan(s) and smooth top with a metal spatula.Tap full cake pans on the counter once or twice to release air bubbles. The batter should look even in the pans.
Bake the coconut cake(s) for about 20 to 30 minutes or until a toothpick inserted in the center emerges clean. Cool in pan on a rack for 5 minutes, turn out onto a rack, remove the paper, and cool completely.