There's increasing competition. This summer, California set new rules demanding automakers sell more electric trucks and vans by 2024, jumpstarting a race among legacy car companies like General Motors, Ford and a number of startups to produce vans and trucks for commercial customers like UPS and FedEx.
Canoo's vans come in two sizes and are designed for small businesses and large last-mile delivery companies. Prices start at $33,000. Delivery fleets or major corporations and logistics companies can also custom build their own vehicles since the Canoo relies on "a skateboard platform" like a trailer bed where the engine is held. Interchangeable shells can be created for the body.
Photo courtesy of Canoo
Earlier this year, retail giant Amazon debuted its electric van produced by rival Rivian. The Irvine-based company is slated to produce 100,000 delivery trucks over the next decade for Amazon as it seeks to have a carbon neutral footprint by 2040.
Canoo was founded in 2017 by two former BMW executives. They landed a deal with carmaker Hyundai Motor Group in February to manufacture their car. In January, the company opened a waitlist for its futuristic-looking minivan that drivers can book through a subscription service. That vehicle is set to launch by the second quarter of 2022.
Canoo said it's also looking to launch the delivery van across markets like Canada, Mexico and Europe.
Meanwhile, stockholders from Hennessy Capital Acquisition will vote next week to approve the proposed merger. If the deal goes through, Canoo Inc. is slated to be listed on the Nasdaq stock exchange under the ticker symbol "GOEV" between Dec. 21 and 23.
"Since announcing the transaction, Canoo has seen substantial growth in consumer demand and significant interest from potential partners in its proprietary market leading EV platform and underlying technologies," said Daniel Hennessy, CEO of the special acquisition company.
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It's also the second electric car company, behind Fisker in Los Angeles, to skip the traditional path to an IPO as the industry takes hold in Southern California. Earlier this year, the Chinese-owned luxury electric carmaker Karma, based in Irvine, said it was talks with investment bankers to go public. It is expected to close by the end in the fourth quarter of 2020.
Canoo Inc. will be listed on the Nasdaq under the ticker symbol "CNOO."
Canoo was founded in 2017 as Evelozcity by two former BMW executives. It opened up a waitlist in January for their eponymous prototype vehicle — a futuristic looking minivan — that it will offer to drivers as a subscription service. Canoo said its 300 workers designed, engineered and manufactured the beta vehicle in 19 months, completing more than 50 physical crash tests.
Electric vehicle maker Rivian, which plans to sell electric pickup trucks next year, announced it raised $2.5 billion in July. It was followed by Los Angeles-based Fisker's news that it will go public in a deal with a SPAC valued at $2.9 billion. Both are direct competitors, although neither is on the market yet.
And Hyundai Motor Group, tapped the Torrance-based startup earlier this year to design the powertrain that will be used for their electric vehicles.
"Today marks an important milestone of Canoo's effort to reinvent the development, production and go-to-market model of the electric vehicle industry," said Canoo co-founder and CEO, Ulrich Kranz. "Our technology allows for rapid and cost-effective vehicle development through the world's flattest skateboard architecture, and we believe our subscription model will transform the consumer ownership experience.
Canoo's "skateboard design" places components of the electric powertrain on a flatbed with wheels underneath the car much like a trailer. That design can be switched out on different vehicle shells.
Elon Musk's publicly traded Tesla, now valued at at $351.4 billion, became the most valuable car company in the world this July. And while it only produces a fraction of the world's new cars, its skyrocketing share value has given momentum to the $95 billion electric vehicle market, with sales expected to quadruple by 2025.
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The Chinese-owned automaker hopes to go public either through a merger with a special purpose acquisition company or through an initial public offering in the U.S. or Hong Kong over the next six months, he said.
Elley didn't say how much the company, headquartered in an office park in Irvine, was hoping to raise but it's in the midst of carrying out ambitious plans to increase its production of cars by at least ten times its current output. It's also developing delivery vans and selling an electric vehicle startup platform to manufacturers.
"We know a lot of Tesla owners, they feel like 'it's my Silicon Valley Camry', right? I mean everybody else has got one, so they're looking for something else. There's definitely a void in the market."
Billing itself a "high-tech mobility incubator," the company says it can help larger car companies that are investing billions of dollars into capital for new green cars manufacture, design and engineer them.
"We are talking with investment bankers right now to take us down that path," he said. "I think that everybody realizes that there is still a void, there is still an opportunity to get into the EV space."
Courtesy of Karma
Elon Musk's publicly traded Tesla became the most valuable car company in the world this July. And while it only produces a fraction of the world's new cars, its skyrocketing share value has given momentum to the $95 billion electric vehicle market, with sales expected to quadruple by 2025.
Electric vehicle maker Rivian, which plans to sell electric pickup trucks next year, announced it raised $2.5 billion earlier this month. It was followed by Los Angeles-based Fisker's news that it will go public in a deal with a SPAC valued at $2.9 billion. Both are direct competitors, although neither is on the market yet.
"If you are an EV company, now is the time to go to market," said Asad Hussain, mobility tech analyst at Pitchbook. "Right now sentiment on EVs is so positive that less-established EV companies — even companies without a product — are getting high valuations, but that could change."
With production facilities in Moreno Valley, Karma is the only U.S.-based electric vehicle startup that is producing and selling vehicles other than Tesla. Last year it rolled out about 550 of its Revero GT, an ultra luxury electric vehicle that starts around $135,000.
But Elley said that Karma wants to ramp up production of the Revero GTE, set for release mid-year 2021, and bring down cost to $100,000 so the car appeals to a broader market.
"We think that we can get the price down to take advantage of more volume and still be the luxury premium space," he said. "We know a lot of Tesla owners, they feel like 'it's my Silicon Valley Camry', right? I mean everybody else has got one, so they're looking for something else. There's definitely a void in the market."
Inside Karma Automotive's manufacturing plant in Irvine, California.Courtesy of Karma
He expects to produce 5,000 to 10,000 of the new cars. Meanwhile, the company is tweaking a branding campaign that can extend its luxury reputation and building lifestyle events around their vehicles such as wine tasting or trips. It's also eyeing a new generation of drivers. Karma has created a partnership with TikTok to raise the company's profile.
"It's a step in the right direction. But it's still a competitive market," Hussain said.
The company is up against Porsche and Tesla in that price range, both with vehicles that have a reputation for better performance, he said. But Karma's "exceptional design" has made it attractive to enthusiasts.
Aston Martin designer Henrik Fisker created what is now Karma as Fisker Automotive in 2007 before it filed for bankruptcy in 2013. It was picked up the following year by auto parts manufacturer Wanxiang Group Corp. and renamed Karma. Four years ago, Henrik Fisker created an eponymously named competitor - which plans to sell its SUV Ocean in 2022.
Wanxiang has pumped about $2 billion into Karma, which has struggled to catch on. Earlier this month, president of Wanxiang's U.S. business Pin Ni said Karma secured $100 million from private investors and has been looking to raise $300 million through shares as it seeks to expand its line of cars. Elley said as part of the financing effort, its parent company has agreed to set the company down the path to an IPO. It comes amid an executive shake-up and layoffs at Karma earlier this year.
Karma is trying to penetrate a market that traditional carmakers from Audi to Hyundai are trying to establish a foothold. Despite the pandemic, most carmakers haven't pulled back electric vehicle investment, a sign of just how much the market is expected to grow.
But Karma executives said the company is not relying on its sporty car for success, it has pivoted to become a car and technology company, an acknowledgement that car-making alone is too capital-intensive to sustain.
Courtesy of Karma
Inside their corporate headquarters five so-called platforms, these modular engine and frames that make up the undergirding design of their electric car, are laid out just beyond the lobby. Using their show floor for these boxy, under-the-hood products is a nod to just how central that strategy has become.
"It is a strategy we have to improve our efficiency and reduce the complexity," said Kevin Zhang, Karma chief technology officer. The modules can be used for Karma's own cars or be sold to larger manufacturers, he explained.
There's appetite for these. Earlier this year, Hyundai Motor Group - one of the world's largest carmakers - tapped Torrance-based startup Canoo for their platform . The terms of the deal weren't disclosed, but a similar deal between the Korean automaker and UK-based Arrival catapulted the startup to unicorn status.
Karma is also working on developing a delivery van that it hopes to sell to major fleet operators like Amazon, FedEx and UPS. Already, competitor Rivian has secured a commitment from Amazon for 100,000 cars.
"Amazon has much higher demand than the hundred thousand they're gonna get from Rivian. They also have a much higher demand for different types of vehicles..Same thing for UPS. Same thing for FedEx," Elley said. "There is a tremendous opportunity there."
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