Two months after a Canoo co-founder and CEO resigned, the Torrance-based company is looking to bounce back with plans to build an Oklahoma manufacturing plant and clinching a European contract for its electric vans.
Chairman and newly instated CEO Tony Aquila announced Thursday at Canoo's "investors day" that the company has secured a contract manufacturer in the Netherlands to begin assembly of the first 1,000 Canoo Lifestyle Vehicle vans in late 2022.
Canoo also announced plans to build a plant in Pryor, Oklahoma where its vehicles will be assembled and eventually exported. It's targeting 15,000 units in 2023. Oklahoma Governor Kevin Stitt was in attendance at the event, which was held at the Texas Motor Speedway in Fort Worth, Texas.
"Let me tell you, Oklahoma is a step above Texas," Stitt joked while on stage with Aquila, who has a ranch in Texas.
The plant will be on 400 acres and about 45 minutes from Tulsa and four hours from Canoo's executive hub in Texas. The company received a $300 million incentive package from the state of Oklahoma.
A working prototype of the company's customizable electric vehicle platform was driven onto the stage before the speakers appeared. Its frame will underpin Canoo's van and pickup, allowing them to share most of the same components, despite having different bodies.
The basic model of the company's Lifestyle Van starts at less than $35,000 and rises to nearly $50,000, before EV incentives.
Much like Manhattan Beach-based Fisker's agreement with Magna Steyr in Austria, Canoo is looking to its contract partner not only to produce its cars, but guide them on the manufacturing process as well.
Its Dutch partner VDL Nedcar in Born operates in a plant built in 1967 that was once owned by Volvo and then Mitsubishi Motors. Since the manufacturing's parent company VDL Groep took over the facility in 2012, the plant has signed a deal with BMW Group to produce various BMW and Mini models. That agreement is set to expire in 2024.
"Nedcar can build as many as 100,000 vehicles for Canoo if needed,'' Aquila said, but added that the partnership is primarily to get the first deliveries fulfilled and learn the manufacturing processes needed for the Oklahoma factory.
Canoo also has plans to sell its vehicles in Europe, where electrification has been more broadly embraced, thanks to mandates and incentives in countries such as Norway and Germany. Aquila said the van could be available in some European countries shortly after the first Nedcar-built models are produced, and that vehicles would eventually be exported from the United States facility.
Canoo will face stiff competition from Ford. The automaker unveiled the F-150 Lightning pickup truck, an electric version of the best-selling vehicle in the country, last month. Prices for it are expected to start at about $41,000.
Like Fisker, Canoo hopes that after-sales parts, constant over-the-air software updates to keep vehicles fresh for second or third owners, and resales will generate significant revenue.
Canoo has gone through a series of changes since it went public last year in a $2.4 billion SPAC deal. A 2020 agreement with Hyundai Motor Group to cooperate on vehicles based on Canoo's platform was effectively declared dead in March, with Aquila telling investors it would get out of the contract engineering business and primarily focus on products for commercial users.
Aquila brought in a raft of new executives, including some former Daimler and Mercedes-Benz USA officials, and Peter Savagian, who worked on the General Motors EV1 project in the 1990s. But the sudden leadership and business plan changes prompted the U.S. Securities and Exchanges Commission to open an investigation into Canoo, which Aquila revealed a month ago.
Rumors of a collaboration with Apple also came to nothing. Canoo co-founder and former CEO Ulrich Kranz, previously of BMW and Gardena-based Faraday Future, took a job at the Cupertino tech giant this month to shore up the car project.
Aquila acknowledged the consolidation that will eventually occur with EV startups as the market gets saturated with plug-in vehicles. He hopes the new team that's been assembled will keep the company nimble and efficient.
"Consolidation is going to happen, he said. "I like to buy companies but I don't like to be bought."
Canoo shares were down Thursday by 2.65% to close at $9.93.
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El Pollo Loco says it will become the first national restaurant company to experiment with door-to-backyard drone delivery.
On June 24, the Costa Mesa-based restaurant chain, known for its fire-roasted chicken, will test "Air Loco," its drone delivery from restaurant kitchens to customers' backyards.
As more and more people ordered delivery during the pandemic, restaurants are looking for alternative cheaper and more efficient ways to bring food to customers' homes. In 2016, Amazon was one of the first companies to discuss using autonomous aerial vehicles to deliver packages to customers' doorsteps in 30 minutes or less. But Amazon Prime Air has yet to get off the ground and into widespread use.
With the Federal Aviation Administration recently approving rules for delivery services to people's homes, it is expected more and more drones will be taking to the skies to make restaurant and other types of deliveries.
For El Pollo Loco, delivery service became a larger part of its business during the pandemic, growing by 250% over the last year, and the drone service is a way to avoid service fees from traditional delivery services like Grubhub, Uber Eats, DoorDash and others that charge up to 30% in transaction fees. It also is a way to make more deliveries more quickly and is expected to be more cost effective and convenient for customers.
"We wanted to lead the way and be the first to deliver a memorable experience to our customers in a cost efficient, fun, and reliable fashion in a way no restaurant brand had previously attempted," Andy Rebhun, El Pollo Loco's Vice President and Digital Officer said in an email.
Other restaurants have tested drone delivery to designated pickup sites, like parking lots, wherein a delivery vehicle will pick up the order from the drop-off site and deliver it to the customer's home for the last leg of the trip. Rebhun said El Pollo Loco wanted to take the step of delivering the items directly to the customer's backyard or front door.
He doesn't think drone delivery for the restaurant industry will be a passing fad.
"I believe drone delivery is one of the more sustainable and cost-effective mechanisms for food delivery in the future," he said. "I believe there will be a bifurcated delivery model in the future where businesses will choose to operate in the most efficient and margin positive mechanism."
El Pollo Loco is launching the pilot with Tel Aviv-based drone startup Flytrex, which manufactures and operates automated drones that travel at 32 miles per hour and use a wire release mechanism to gently lower food orders from 80 feet.
The drone for the service is also outfitted with a fastened delivery box that keeps orders intact, which means customers will receive their orders packed in El Pollo Loco's new special packaging — used to keep food hotter for longer — more quickly than it takes for a conventional delivery to arrive.
When the order leaves the restaurant, the food will be loaded on the Air Loco drone and once it takes off, it will ascend to about 200 feet and start the flight to the destination, Rebhun said. The drone can carry up to 6.6 pounds of food. Once the food is lowered from the 80-foot wire, the tamper-proof sealed delivery bag will detach from the crane and the customer can retrieve their food.
El Pollo Loco will begin its pilot at 10 restaurants, which will be selected within the next 45 to 60 days, the company said. Once the test is completed, it plans to expand to more of its 480 restaurants depending on demand and regulatory approval from the FAA. During the pilot, a select number of El Pollo Loco's Loco Rewards members in Southern California will be surprised with one of the first flights, the company said.
It doesn't appear as though delivery orders will slow down for restaurants.
Analysts predict that online ordering will grow this year even as restaurants open back up to traditional full-capacity dining service. The global online food delivery market is expected to grow from $115.07 billion in 2020 to $126.91 billion in 2021.
The growth rate for online food ordering and restaurant delivery has been 20% in the last five years and is expected to comprise about 40% of all restaurant sales by 2025.
Earlier this year, Pizza Hut Israel said it would deploy drones to deliver pizzas. But rather than delivering directly to customers' homes, the company said the drones would drop-off the orders at a government-approved landing zone, like a parking lot, and from there a driver would make the final leg of the delivery.
In 2019, Uber Eats started testing drone delivery for McDonald's in San Diego.
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Metropolis CEO Alex Israel said there were times during the pandemic where the startup's future didn't seem certain. On Wednesday, he talked about the last year and the future of mobility during dot.LA and CoMotion's Motivate SOCAL conference, dedicated to highlighting early-stage mobility startups in the region.
Israel's Los Angeles-based startup aims to make parking easy in car-clogged cities across the country. Metropolis uses AI technology to read drivers' license plates as they enter a parking lot, then charges them via an app, giving them a "touchless parking experience."
The startup raised $41 million in Series A financing earlier this year. It has parking garages throughout the U.S., in cities that include Los Angeles and Nashville.
When the pandemic prompted businesses to close their doors and remote working took hold, parking structure demand plummeted.
"I think the net result of that on my business at the time, we're thinking April 2020... Armageddon," said Israel. "I mean absolute chaos, collapse, and panic." But the pandemic didn't dissuade investors. Metropolis raised a $41 million Series A round earlier this year.
COVID may have shut down offices, but it also made the touchless parking process like the one Metropolis offers more appealing to consumers. Owners of parking garages and real estate investors were also drawn to it for its efficiency and low-cost solutions, Israel said.
"Nostalgia for the Future"
Israel thinks Metropolis can create "nostalgia for the future."
"What you see when people use our product is this moment of surprise and delight, and it's this sentiment of, 'Wait, why wasn't it [always] this way? Why couldn't I seamlessly pay for parking? Why did I even have to fumble with tickets?" he said.
Israel argues that dominant industries block this by failing to adopt new technologies. He pointed out the relationship between the archaic taxi industry and the newer rideshare industry as an example.
"I think you see very similar trends within parking. You've had a very entrenched industry that has moved in a very standard way for a very long time, making money in a very standard way," he said. "There are players that are forward thinking and interested in innovation, but in general, the industry as a whole has not been interested in innovation because it's been antithetical to their core business model."
Uber and Lyft's successes have added to the discussion on mobility, he said. And he expects autonomous vehicles to do the same. He thinks prices on the cars will be low, making them a "mass equalizer." He said time will tell whether such vehicles will add to traffic or make transportation faster.
"I think it'll be exciting, but we'll have to wait a long time before we see that true shift, and we see less traffic, and a real, true impact on how we move around cities," he said.