Arkansas-based EV startup Canoo announced it backed out of a deal to use Dutch company VDL Nedcar as contract manufacturer of its Lifestyle Vehicle.

Canoo says it is accelerating production plans in the United States instead of having its first EV built in the Netherlands. The company adds that shifting production from Europe to the plants it is building in northwest Arkansas and Pryor, Oklahoma, will help it reduce supply-chain vulnerabilities and overseas shipping costs. 

The move will also help it bring its vehicles more quickly to market, control more securely the creation of additional innovation and IP, and increase advanced manufacturing jobs in the communities that support it.

“We appreciate the months of effort VDL Nedcar invested to provide us with a contract manufacturing option, but we have concluded that building in America is better aligned with our mission and current focus to invest in the communities and states that are investing in hi-tech manufacturing alongside us, creating American jobs and innovation. The support from Oklahoma and Arkansas will allow us to achieve SOP earlier and with less risk on many fronts.”

Tony Aquila, Chairman & CEO at Canoo

Gallery: Canoo Lifestyle Vehicle Electric Minivan

With the contract manufacturing deal now canceled, VDL Nedcar will return Canoo's prepayment of $30.4 million, although parent company VDL Groep will buy $8.4 million worth of Canoo stock. Actually, the US firm says it is still exploring opportunities to collaborate with VDL Groep in Europe.

As for its US production plans, Canoo said the Oklahoma project remains on track to start manufacturing in late 2023, but the company now expects to begin building EVs next year in Arkansas instead of the Netherlands.

The startup forecasts a production between 3,000 and 6,000 EVs in 2022 in Arkansas, up from its previous target of up to 1,000 overseas. For 2023, the company forecasts 14,000–17,000 vehicles, compared with its prior target of 15,000. The updated production targets for 2024 and 2025 are 40,000–50,000 and 70,000–80,000, respectively.

With the Oklahoma plant at full capacity, Canoo estimates it will build more than 150,000 vehicles a year eventually.

The Arkansas facility was originally planned to build small package delivery vehicles, but the facility will be able to flex between that vehicle and Canoo's Lifestyle Vehicle seven-seat compact minivan based on the company's skateboard platform.

Got a tip for us? Email: