Robots build parts for Canoo vehicles at the company's Oklahoma City manufacturing facility. (Photo by Janelle Stecklein/Oklahoma Voice)
This week, an Oklahoma City electric vehicle company announced it had manufactured three vehicles in the state — the first Oklahoma-made automobiles since 2006.
The announcement marked a momentous occasion for both Gov. Kevin Stitt and Oklahoma’s economic development officials. They’ve continued to bet big that the state can capitalize on the shifting automobile market and become a mecca for companies that are exploring electric vehicles.
For some, Stitt’s laser focus on wooing automobile manufacturers may have seemed like a fool’s errand.
After all, state leaders couldn’t figure out how to keep an Oklahoma City General Motors plant operational. GM closed the plant, which assembled the Chevy Malibu, in 2006.
Also, for decades the Midwest has housed the nation’s automotive juggernauts — not the south. But Oklahoma economic development officials are convinced that they can capitalize on changing technology and growing wage pressure to diversify the economy.
That wager has led to very high-profile — and crushing — rejections.
In the past few years, the state has been publicly rebuffed by Volkswagen, which chose Canada; Panasonic, which picked Kansas; and Tesla, which settled on Austin.
So when Oklahoma economic development officials announced that they’d landed a little known startup named Canoo, it felt a little like Oklahoma had won the booby prize.
The company had not manufactured a single vehicle, yet state leaders had promised Canoo a package of economic incentives reportedly valued at over $300 million, including a record $15 million in cash from the governor’s discretionary Quick Action Closing Fund.
Skepticism grew when Canoo leaders revealed in an earnings call that they were hemorrhaging cash.
Then, last November, the company abruptly announced that it planned to manufacture their vehicles in an Oklahoma City warehouse off of Interstate 40, not in Pryor as expected.
In the months since, we’ve heard very little about Canoo’s progress.
Oklahomans though have continued to watch closely, trying to gauge whether the state made a good decision in banking on Canoo.
We want economic development officials to back winners who want to invest in Oklahoma, who can deliver on their promises of high quality jobs and have a sustainable business model.
Then this week, Tony Aquila, Canoo chairman and CEO, unexpectedly invited a small group of media to tour his factory that is expected to employ as many as 120 Oklahomans by the end of the year.
It’s a noisy, echoey warehouse that sits just off the Interstate 40 frontage road near the Canadian County line. It’s filled with robotic equipment that quickly builds car parts with the help of humans.
Aquila is an ardent believer in the future of his company. He has seemingly boundless enthusiasm for his boxy creations that come equipped with a rectangular steering wheel and average about 200 to 250 miles per charge.
“I tell everybody I’m one deal away from screwing up my track record,” Aquila said. “But so far I’ve been successful. And, I believe in this one more than I believe in any other company I’ve done. Not only what it can do for America, American jobs, the heartland, but also for our military and our Department of Defense.”
He said Canoo is capitalizing a market that nobody is really in yet.
Unlike other electric vehicle manufacturers, Aquila’s business model focuses on fleet sales. He believes the future of Canoo — at least for now — is selling to businesses that buy thousands of vehicles at a time. Each vehicle is expected to retail for about $50,000 to $60,000. By selling in bulk, the company can focus on providing great service, maintenance and repair support to its customers, he said.
Oklahoma is slated to purchase the first three manufactured delivery vehicles, which are already emblazoned with the state logo. They’ll be delivered early next year.
While stock prices are trending in the 20-cent range, Aquila said he believes his company is worth upwards of $15 billion. He said the value of Canoo stock right now is “one hell of a deal” because it’s trading below value.
He also believes in his own company so much that he’s invested a lot of his own funding.
Aquila said Canoo has raised $1.6 billion to get to this week’s production milestone.
“The financial health of the company, in my opinion, speaks to a couple of things, which is one, look at how much capital we’ve raised, and how we raise it in small increments,” he said. “We achieve a milestone, we go get some more capital, or I put in more money.”
Aquila said the company has not yet received a dollar from the state because Stitt put a deal together that requires Canoo to meet performance metrics in order to receive taxpayer support.
He said five startup electric vehicle manufacturers have gone under — some of which have raised a lot more money — without getting a product to market.
Right now the Oklahoma City facility is producing one vehicle per day, but Aquila said he hopes to increase that to four to eight per day to keep up with demand.
By the end of the year, they’ll bring as many as 120 jobs to the site, he promised. They’re also hiring in Pryor, where battery modules are being built.
Workers are paid between $18 and $26 per hour.
Canoo has purchased all the land on the surrounding frontage roads to add buildings as demand grows. They also have a top secret, sedan-shaped, vehicle hidden beneath a blue tarp.
“Come back in two or three months, and you’ll see a whole bunch of different stuff,” Aquila said.
One thing is for sure. It will be interesting to see if Canoo can continue to build on its momentum, and we’ll be watching to see whether Oklahoma’s economic development officials actually bet big on the right electric vehicle startup and its determined CEO.
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