Another Electric Vehicle Maker Leaves California

• EV startup Canoo moves its headquarters from California to Texas, while also moving its engineering operations closer to its production site in Oklahoma.

• Canoo and other EV van builders are now battling slowing demand in the purpose-built vehicle sphere, as major retailers and logistics giants are not in a hurry to go electric.

• The EV startup has received a relatively large order from the state of Oklahoma, but the company is not yet considered a major challenger for GM's BrightDrop and Rivian.

Tesla may not have been the first automaker to move its headquarters from California to Texas in recent years—that honor goes to Toyota—but it's clear the Lone Star state has been wooing the tech and manufacturing sectors for some time.

EV startup Canoo, which currently produces its futuristic electric minivan in Oklahoma, has revealed that it will formally move its company headquarters to Justin, Texas, located in the northern tip of the state.

Canoo will also move its engineering facilities from California to Oklahoma, closer to its main manufacturing footprint.

The EV maker, which has recently bought up manufacturing hardware from rival startup Arrival, currently has two sites in the state: one in Oklahoma City and one in Pryor, northeast of Tulsa.

"One of the primary drivers for the move to Oklahoma is the co-location of engineering and manufacturing within the company's nearly 500,000-square-foot manufacturing facility in Oklahoma City," Canoo explained. "This strategic decision will drive operational efficiencies and foster greater collaboration as Canoo continues to meet goals toward step level ramp manufacturing."

Still, the two moves are not a big surprise for industry watchers, as Canoo made a big splash in Oklahoma in 2023 with orders for 1,000 of its vans from the state government, and has been working to hire more people in the state for its manufacturing sites.

However, Canoo's longer-term trajectory is less certain, having continued to post very limited revenue over the past several quarters amid significant expenditures relating to expansion of its Oklahoma footprint, with its stock having dropped 80.9% since the start of the year. The second quarter of 2024 saw revenues of $605,000, representing a relatively small number of vans.

Canoo's move from California is also happening against a backdrop of a slowdown in momentum in the purpose-built EV van segment, which has already affected much larger automakers with comparable models, including GM.

One additional worrying sign for players in this segment is the current lack of blockbuster orders from large entities, like the US Postal Service, which has recently begun taking deliveries of its next-gen gas-engined delivery vehicle produced by Oshkosh.

By comparison, the USPS has ordered just six electric vans from Canoo in 2024, safe to say for evaluation purposes rather than a mass effort to electrify its fleet. Canoo's much-advertised order from NASA to support the Artemis moon missions has also been in the single digits.

Overall, large retailers have been stingy this year with orders for electric vans from a variety of automakers large and small, with high per-unit pricing and the substantial costs of charging infrastructure still keeping fleet buyers away.

Should parcel delivery companies, as well as the USPS, switch to EVs as soon as possible to reduce emissions, or is this a relatively distant concern? Let us know what you think in the comments below.