Canoo's electric pickup truck
Canoo Inc., the publicly traded electric automaker that is moving its headquarters from Texas to Bentonville, announced late Wednesday that it will accelerate production and shift all production from Europe to the United States.
Specifically, the company will be manufacturing at the northwest Arkansas facility and is on target to bring online a “mega micro” factory in Pryor, Oklahoma in late 2023.
Canoo said it plans to increase production next year to 3,000-6,000 from 500-1,000 units and bring that to 70,000-80,000 units by 2025. The company said it has already reached another production milestone as well, by sourcing 96% of its parts from the U.S. and “Allied Nations.”
Also on Wednesday, Canoo announced that it is exploring opportunities to partner with manufacturer VDL Groep of Eindhoven, Netherlands, and has ceased discussions with another Dutch manufacturer, VDL Nedcar.
VDL Nedcar would have helped Canoo increase capacity to 25,000 units in 2023, Tony Aquila, investor, chairman and CEO, said during the company’s second-quarter earnings call on Aug. 16.
Now, VDL Nedcar will return Canoo’s prepayment of $30.4 million, and VDL Groep will spend $8.4 million on Canoo stock, the company said.
“We appreciate the months of effort VDL Nedcar invested to provide us with a contract manufacturing option, but we have concluded that building in America is better aligned with our mission and current focus to invest in the communities and states that are investing in hi-tech manufacturing alongside us, creating American jobs and innovation,” Aquila said in a news release.
The company said it is splitting with VDL Nedcar for a number of reasons, including that doing so will better facilitate its ability to utilize incentives from Arkansas and Oklahoma. The Arkansas Economic Development Commission has yet to release details on the incentives that Canoo qualifies for.
Aquila said in the release that the states’ support would allow the company to get up and running with less risk.
Canoo said ending the discussions with VDL Nedcar would reduce supply chain vulnerabilities; increase its speed to market; allow it to more securely control the creation of additional innovation and intellectual property; increase advanced manufacturing jobs; and save thousands of dollars per unit by eliminating warranty risks, tariffs and overseas shipping costs.
TechCrunch reports that Canoo could also have made this change in order to pursue other government contracts and incentives, as the recently signed into law $1 trillion infrastructure package includes the Buy American Act.
“The initiatives announced today are another step in executing our strategy of reducing risk and increasing certainty. We look forward to additional announcements,” Aquila said in the release.
VDL Groep President and CEO Willem van der Leegte added, “We see electric vehicles as a significant economic driver. We are pleased to invest in Canoo and look forward to a long and mutually beneficial relationship.”
In addition, Aquila said, through exploring a partnership with VDL Groep, Canoo is considering how and when to expand into Europe with less risk and take advantage of advanced manufacturing technologies.
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