Canoo to move more engineers out of California

US e-van maker Canoo will migrate its engineering workforce to its two Oklahoma locations, Oklahoma City and Pryor as it continues to seek benefits from co-location of engineering and manufacturing within the company's manufacturing facility in Oklahoma City.

Approximately 137 engineering positions will relocate from California to Texas and Oklahoma beginning in the fourth quarter of 2024, with most roles based in OK. The firm is also hiring additional staff in OK and TX, expecting to reach 150 open positions in the “near future”.

Its shift towards OK is not new. “As we accelerate the manufacturing phase, we are continuing the migration of our workforce to our Oklahoma and Texas facilities,” Canoo CEO Tony Aquila told analysts last month. And he stresses that it has been a well-received process thus far.

“The workforce that we have been hiring there, we are really impressed. We have been relocating a lot of people. They really love the cost of living, the environment, the taxes and so on,” Aquila says.

The OK ramp-up is being accelerated both as Canoo increases customer deliveries — the firm does not build vehicles until they are ordered — and also owing to increased manufacturing capacity. The firm enjoyed record revenue of $605,000 in Q2, mainly derived from its contracts with the US Postal Service (USPS) and the US government’s Defense Innovation Units.

And the advanced manufacturing assets that Canoo bought from bankrupt UK e-van maker Arrival were shipped to OK in late June and early Q3. “We are in the process of commissioning these assets, which advances our focus on vertical integration,” Aquila said in mid-August.

Waiting for more

But there are no signs as yet of other announcements yet from additional customers that have chosen Canoo, despite heavy hints from the firm that these could drop sometime this quarter. “We let our clients decide what they communicate,” says Aquila.

“We see ourselves as a part of their competitive advantage. And so, eventually, this will become super-surprising information. In the quarter, we anticipate a few of those to fully break through. And of course, we have indications that they would like to make them public,” he continues.

While no announcements have been made with just three weeks of Q3 remaining, the UK — where Canoo has been toiting its products hard in recent months — could be a potential source of this promised new demand. The new Labour administration in the country “love[s] the fact that we are focused on a few customers that benefit to the government, because almost all the customers are government-assisted funding”, Aquila says.

“In addition to that, they have stringent mandates that the new party, which has been elected, has reinforced,” he continues. “Mandated EV adoption creates substantial tailwinds.” And he reports “positive initial feedback on our LDV130 and LDV190 vehicles as a unique fit for the UK LCV market”.

And it is not just products that Canoo is hoping to bring to the UK, but potentially jobs too. “They have lost all of their manufacturing in this category just recently. India took Jaguar out of the UK. And we believe that, with the free trade zone, we will be able to supply our MPP1 [platform] and create assembly jobs within the UK,” Aquila predicts.

Another source of demand will likely come from expansion of existing customers’ needs. “We are focused on the upcoming USPS [request for proposal] for electric vehicles expected later this year or in early Q1'25 for an estimated 10,000-12,000 units,” Aquila says.

And Canoo stresses that this is why it has been selective in what customers it has gone after. “What we have done is we focused on a few customers that have high volume, multi-year requirements and an implementation schedule in their internal system, often because of infrastructure charging, that aligns with our ability to scale,” Aquila explains. “We are very targeted on customers that do not have any range anxiety or charging issues for auxiliary charging until their full infrastructure is in place.

“From our perspective, we will always, as long as we can, focus on the few that allow us to sell the many. It is much more of a judo model than a boxing model,” he continues.

Canoo will also relocate its corporate headquarters Justin, TX, where the firm’s executive leadership team has been based since 2021.