Canoo Is Buying Up This EV Startup’s Production Equipment

• Canoo buys factory equipment from EV startup Arrival at deep discount, aimed at boosting its manufacturing.
• The EV maker has been producing its electric passenger and delivery vans in small numbers, aimed at commercial customers.
• Canoo is one of several startups that have designed custom electric vans in the past few years, along with BrightDrop and Rivian.

Canoo says it has purchased the manufacturing assets of EV startup Arrival Automotive UK Limited, at pennies on the dollar.

EV van maker Canoo has bought 20 containers worth of Arrival’s manufacturing assets and has shipped them to Oklahoma for commissioning. Back in January, Canoo also bought “substantially all of the new and like-new assets” of Arrival’s US business unit.

The purchased equipment includes robots, vehicle testing equipment, dispensing systems, programmable logic controllers, spare parts, and other hardware.

“These assets were all purchased at a discounted price of over 80% of the estimated value and are new and like-new assets that were carefully reviewed, inspected, and selected by Canoo’s team on multiple on-site visits conducted over several months,” Canoo said in a statement.

The purchase is aimed at increasing Canoo’s assembly capacity and vehicle cabin build capacity.

Canoo received a small order for EV vans from NASA in 2023.

Arrival has been on shaky ground since shifting all of its business to the US in 2023, citing the Inflation Reduction Act as offering a more advantageous climate. But it has struggled to get production started in the US after leaving the UK and shedding hundreds of employees.

The two startups’ vehicle plans were not too dissimilar, with both targeting commercial fleets with custom-engineered electric vans.

But Canoo has been a bit further ahead when it comes to production, able to field a fleet of test vehicles a little while ago, with series production having started in 2023.

What the two still have in common is that both endured long development cycles and were ultimately beaten to production by General Motors-backed BrightDrop in 2021, and Rivian a little bit later.

“Our current strategy will save our shareholders tens of millions of dollars, which today is not properly reflected in the value of our company,” Tony Aquila, Investor, Executive Chairman, and CEO of Canoo, said regarding the equipment purchase.

Accordingly, Canoo’s longer-term future remains far from certain as well. The EV startup posted significant losses in 2023 even as it has secured orders from a number of notable clients, while also seeing the likes of Rivian and BrightDrop field electric delivery vehicles of their own in much larger volumes.

Canoo’s main EV model is offered in two distinct variants: a Lifestyle Delivery Vehicle (LDV) for commercial goods, and as a Lifestyle Vehicle (LV) passenger van. The first deliveries to customers began earlier this year.

Canoo currently expects “to scale manufacturing” of its vans in 2024 at its Oklahoma plant, which currently employs over 100 workers but is designed to support up to 1100.

Production is under way, therefore, but in small quantities for now.

Will there be much demand for electric vans from smaller manufacturers like Canoo, or will they eventually be upstaged by larger automakers? Let us know what you think in the comments.